Correlation Between U Media and Analog Integrations
Can any of the company-specific risk be diversified away by investing in both U Media and Analog Integrations 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 Analog Integrations 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 Analog Integrations, you can compare the effects of market volatilities on U Media and Analog Integrations 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 Analog Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Analog Integrations.
Diversification Opportunities for U Media and Analog Integrations
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 6470 and Analog is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Analog Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Integrations 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 Analog Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Integrations has no effect on the direction of U Media i.e., U Media and Analog Integrations go up and down completely randomly.
Pair Corralation between U Media and Analog Integrations
Assuming the 90 days trading horizon U Media Communications is expected to generate 1.3 times more return on investment than Analog Integrations. However, U Media is 1.3 times more volatile than Analog Integrations. It trades about 0.31 of its potential returns per unit of risk. Analog Integrations is currently generating about 0.06 per unit of risk. If you would invest 4,975 in U Media Communications on September 12, 2024 and sell it today you would earn a total of 1,005 from holding U Media Communications or generate 20.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Media Communications vs. Analog Integrations
Performance |
| Timeline |
| U Media Communications |
| Analog Integrations |
U Media and Analog Integrations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Analog Integrations
The main advantage of trading using opposite U Media and Analog Integrations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Analog Integrations 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 Analog Integrations will offset losses from the drop in Analog Integrations' long position.| U Media vs. Gemtek Technology Co | U Media vs. Ruentex Development Co | U Media vs. WiseChip Semiconductor | U Media vs. Novatek Microelectronics Corp |
| Analog Integrations vs. Lelon Electronics Corp | Analog Integrations vs. WT Microelectronics Co | Analog Integrations vs. Higher Way Electronic | Analog Integrations vs. Formosa International Hotels |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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