Correlation Between U Media and Azion
Can any of the company-specific risk be diversified away by investing in both U Media and Azion at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining U Media and Azion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Media Communications and Azion, you can compare the effects of market volatilities on U Media and Azion and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in U Media with a short position of Azion. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Azion.
Diversification Opportunities for U Media and Azion
Average diversification
The 3 months correlation between 6470 and Azion is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Azion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azion and U Media is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on U Media Communications are associated (or correlated) with Azion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azion has no effect on the direction of U Media i.e., U Media and Azion go up and down completely randomly.
Pair Corralation between U Media and Azion
Assuming the 90 days trading horizon U Media Communications is expected to under-perform the Azion. In addition to that, U Media is 1.04 times more volatile than Azion. It trades about -0.09 of its total potential returns per unit of risk. Azion is currently generating about 0.0 per unit of volatility. If you would invest 2,530 in Azion on October 20, 2024 and sell it today you would lose (5.00) from holding Azion or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Media Communications vs. Azion
Performance |
| Timeline |
| U Media Communications |
| Azion |
U Media and Azion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Azion
The main advantage of trading using opposite U Media and Azion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Azion can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Azion will offset losses from the drop in Azion's long position.| U Media vs. Intai Technology | U Media vs. China Metal Products | U Media vs. Asmedia Technology | U Media vs. Taiwan Mobile Co |
| Azion vs. China Times Publishing | Azion vs. Emerging Display Technologies | Azion vs. Taiwan Speciality Chemicals | Azion vs. Silicon Power Computer |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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