Correlation Between U Media and Fu Burg
Can any of the company-specific risk be diversified away by investing in both U Media and Fu Burg 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 Fu Burg 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 Fu Burg Industrial, you can compare the effects of market volatilities on U Media and Fu Burg 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 Fu Burg. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Fu Burg.
Diversification Opportunities for U Media and Fu Burg
Very good diversification
The 3 months correlation between 6470 and 8929 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Fu Burg Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fu Burg Industrial 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 Fu Burg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fu Burg Industrial has no effect on the direction of U Media i.e., U Media and Fu Burg go up and down completely randomly.
Pair Corralation between U Media and Fu Burg
Assuming the 90 days trading horizon U Media Communications is expected to under-perform the Fu Burg. But the stock apears to be less risky and, when comparing its historical volatility, U Media Communications is 2.02 times less risky than Fu Burg. The stock trades about -0.01 of its potential returns per unit of risk. The Fu Burg Industrial is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,435 in Fu Burg Industrial on September 2, 2024 and sell it today you would earn a total of 960.00 from holding Fu Burg Industrial or generate 39.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Media Communications vs. Fu Burg Industrial
Performance |
| Timeline |
| U Media Communications |
| Fu Burg Industrial |
U Media and Fu Burg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Media and Fu Burg
The main advantage of trading using opposite U Media and Fu Burg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Fu Burg 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 Fu Burg will offset losses from the drop in Fu Burg's long position.| U Media vs. Accton Technology Corp | U Media vs. HTC Corp | U Media vs. Wistron NeWeb Corp | U Media vs. Arcadyan Technology Corp |
| Fu Burg vs. Gloria Material Technology | Fu Burg vs. Wei Chih Steel | Fu Burg vs. Daxin Materials Corp | Fu Burg vs. Nankang Rubber Tire |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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