Correlation Between Superior Plus and UET United
Can any of the company-specific risk be diversified away by investing in both Superior Plus and UET United 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 Superior Plus and UET United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and UET United Electronic, you can compare the effects of market volatilities on Superior Plus and UET United 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 Superior Plus with a short position of UET United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and UET United.
Diversification Opportunities for Superior Plus and UET United
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Superior and UET is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and UET United Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UET United Electronic and Superior Plus 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 Superior Plus Corp are associated (or correlated) with UET United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UET United Electronic has no effect on the direction of Superior Plus i.e., Superior Plus and UET United go up and down completely randomly.
Pair Corralation between Superior Plus and UET United
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the UET United. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.31 times less risky than UET United. The stock trades about -0.04 of its potential returns per unit of risk. The UET United Electronic is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 96.00 in UET United Electronic on August 25, 2024 and sell it today you would earn a total of 14.00 from holding UET United Electronic or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
Superior Plus Corp vs. UET United Electronic
Performance |
| Timeline |
| Superior Plus Corp |
| UET United Electronic |
Superior Plus and UET United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and UET United
The main advantage of trading using opposite Superior Plus and UET United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, UET United 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 UET United will offset losses from the drop in UET United's long position.| Superior Plus vs. Fast Retailing Co | Superior Plus vs. Auto Trader Group | Superior Plus vs. Monster Beverage Corp | Superior Plus vs. Suntory Beverage Food |
| UET United vs. Cisco Systems | UET United vs. Telefonaktiebolaget LM Ericsson | UET United vs. Superior Plus Corp | UET United vs. NMI Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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