Correlation Between Provision Information and U Ming
Can any of the company-specific risk be diversified away by investing in both Provision Information and U Ming 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 Provision Information and U Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provision Information CoLtd and U Ming Marine Transport, you can compare the effects of market volatilities on Provision Information and U Ming 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 Provision Information with a short position of U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provision Information and U Ming.
Diversification Opportunities for Provision Information and U Ming
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Provision and 2606 is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Provision Information CoLtd and U Ming Marine Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Ming Marine and Provision Information 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 Provision Information CoLtd are associated (or correlated) with U Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Ming Marine has no effect on the direction of Provision Information i.e., Provision Information and U Ming go up and down completely randomly.
Pair Corralation between Provision Information and U Ming
Assuming the 90 days trading horizon Provision Information is expected to generate 5.23 times less return on investment than U Ming. But when comparing it to its historical volatility, Provision Information CoLtd is 3.12 times less risky than U Ming. It trades about 0.23 of its potential returns per unit of risk. U Ming Marine Transport is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 5,650 in U Ming Marine Transport on November 28, 2024 and sell it today you would earn a total of 1,580 from holding U Ming Marine Transport or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Provision Information CoLtd vs. U Ming Marine Transport
Performance |
| Timeline |
| Provision Information |
| U Ming Marine |
Provision Information and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provision Information and U Ming
The main advantage of trading using opposite Provision Information and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provision Information position performs unexpectedly, U Ming 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 U Ming will offset losses from the drop in U Ming's long position.| Provision Information vs. Union Insurance Co | Provision Information vs. U Media Communications | Provision Information vs. Ching Feng Home | Provision Information vs. Cameo Communications |
| U Ming vs. Sincere Navigation Corp | U Ming vs. Wan Hai Lines | U Ming vs. Yang Ming Marine | U Ming vs. Formosa Chemicals Fibre |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |