Correlation Between Eminent Luggage and U Ming
Can any of the company-specific risk be diversified away by investing in both Eminent Luggage 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 Eminent Luggage and U Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eminent Luggage and U Ming Marine Transport, you can compare the effects of market volatilities on Eminent Luggage 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 Eminent Luggage with a short position of U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eminent Luggage and U Ming.
Diversification Opportunities for Eminent Luggage and U Ming
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eminent and 2606 is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eminent Luggage 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 Eminent Luggage 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 Eminent Luggage 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 Eminent Luggage i.e., Eminent Luggage and U Ming go up and down completely randomly.
Pair Corralation between Eminent Luggage and U Ming
Assuming the 90 days trading horizon Eminent Luggage is expected to under-perform the U Ming. But the stock apears to be less risky and, when comparing its historical volatility, Eminent Luggage is 1.66 times less risky than U Ming. The stock trades about -0.35 of its potential returns per unit of risk. The U Ming Marine Transport is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,650 in U Ming Marine Transport on September 5, 2024 and sell it today you would earn a total of 180.00 from holding U Ming Marine Transport or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eminent Luggage vs. U Ming Marine Transport
Performance |
| Timeline |
| Eminent Luggage |
| U Ming Marine |
Eminent Luggage and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eminent Luggage and U Ming
The main advantage of trading using opposite Eminent Luggage and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eminent Luggage 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.| Eminent Luggage vs. U Ming Marine Transport | Eminent Luggage vs. Sinopower Semiconductor | Eminent Luggage vs. New Asia Construction | Eminent Luggage vs. Dawushan Farm Tech |
| U Ming vs. Universal Microelectronics Co | U Ming vs. AVerMedia Technologies | U Ming vs. Symtek Automation Asia | U Ming vs. WiseChip Semiconductor |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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