Correlation Between UET United and Aedas Homes
Can any of the company-specific risk be diversified away by investing in both UET United and Aedas Homes 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 UET United and Aedas Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UET United Electronic and Aedas Homes SA, you can compare the effects of market volatilities on UET United and Aedas Homes 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 UET United with a short position of Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and Aedas Homes.
Diversification Opportunities for UET United and Aedas Homes
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UET and Aedas is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and Aedas Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SA and UET United 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 UET United Electronic are associated (or correlated) with Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SA has no effect on the direction of UET United i.e., UET United and Aedas Homes go up and down completely randomly.
Pair Corralation between UET United and Aedas Homes
Assuming the 90 days trading horizon UET United is expected to generate 1.7 times less return on investment than Aedas Homes. In addition to that, UET United is 2.52 times more volatile than Aedas Homes SA. It trades about 0.03 of its total potential returns per unit of risk. Aedas Homes SA is currently generating about 0.11 per unit of volatility. If you would invest 965.00 in Aedas Homes SA on September 18, 2024 and sell it today you would earn a total of 1,515 from holding Aedas Homes SA or generate 156.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UET United Electronic vs. Aedas Homes SA
Performance |
| Timeline |
| UET United Electronic |
| Aedas Homes SA |
UET United and Aedas Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and Aedas Homes
The main advantage of trading using opposite UET United and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.| UET United vs. Cisco Systems | UET United vs. Nokia | UET United vs. Superior Plus Corp | UET United vs. SIVERS SEMICONDUCTORS AB |
| Aedas Homes vs. Lennar | Aedas Homes vs. Sekisui Chemical Co | Aedas Homes vs. Superior Plus Corp | Aedas Homes vs. SIVERS SEMICONDUCTORS AB |
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.
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