Correlation Between Tai Tung and U Media
Can any of the company-specific risk be diversified away by investing in both Tai Tung and U Media 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 Tai Tung and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tai Tung Communication and U Media Communications, you can compare the effects of market volatilities on Tai Tung and U Media 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 Tai Tung with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tai Tung and U Media.
Diversification Opportunities for Tai Tung and U Media
Very good diversification
The 3 months correlation between Tai and 6470 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tai Tung Communication and U Media Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Media Communications and Tai Tung 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 Tai Tung Communication are associated (or correlated) with U Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Media Communications has no effect on the direction of Tai Tung i.e., Tai Tung and U Media go up and down completely randomly.
Pair Corralation between Tai Tung and U Media
Assuming the 90 days trading horizon Tai Tung Communication is expected to generate 1.57 times more return on investment than U Media. However, Tai Tung is 1.57 times more volatile than U Media Communications. It trades about 0.05 of its potential returns per unit of risk. U Media Communications is currently generating about -0.03 per unit of risk. If you would invest 1,875 in Tai Tung Communication on August 31, 2024 and sell it today you would earn a total of 775.00 from holding Tai Tung Communication or generate 41.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Tai Tung Communication vs. U Media Communications
Performance |
| Timeline |
| Tai Tung Communication |
| U Media Communications |
Tai Tung and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tai Tung and U Media
The main advantage of trading using opposite Tai Tung and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tai Tung position performs unexpectedly, U Media 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 Media will offset losses from the drop in U Media's long position.The idea behind Tai Tung Communication and U Media Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| U Media vs. Accton Technology Corp | U Media vs. HTC Corp | U Media vs. Wistron NeWeb Corp | U Media vs. Arcadyan Technology Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |