Correlation Between UET United and MidCap Financial
Can any of the company-specific risk be diversified away by investing in both UET United and MidCap Financial 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 MidCap Financial 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 MidCap Financial Investment, you can compare the effects of market volatilities on UET United and MidCap Financial 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 MidCap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and MidCap Financial.
Diversification Opportunities for UET United and MidCap Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UET and MidCap is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and MidCap Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidCap Financial Inv 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 MidCap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidCap Financial Inv has no effect on the direction of UET United i.e., UET United and MidCap Financial go up and down completely randomly.
Pair Corralation between UET United and MidCap Financial
Assuming the 90 days trading horizon UET United is expected to generate 1.25 times less return on investment than MidCap Financial. In addition to that, UET United is 3.02 times more volatile than MidCap Financial Investment. It trades about 0.02 of its total potential returns per unit of risk. MidCap Financial Investment is currently generating about 0.07 per unit of volatility. If you would invest 863.00 in MidCap Financial Investment on October 11, 2024 and sell it today you would earn a total of 414.00 from holding MidCap Financial Investment or generate 47.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UET United Electronic vs. MidCap Financial Investment
Performance |
| Timeline |
| UET United Electronic |
| MidCap Financial Inv |
UET United and MidCap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and MidCap Financial
The main advantage of trading using opposite UET United and MidCap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, MidCap Financial 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 MidCap Financial will offset losses from the drop in MidCap Financial's long position.| UET United vs. Flutter Entertainment PLC | UET United vs. REMEDY ENTERTAINMENT OYJ | UET United vs. NIGHTINGALE HEALTH EO | UET United vs. YOOMA WELLNESS INC |
| MidCap Financial vs. Southwest Airlines Co | MidCap Financial vs. Singapore Airlines Limited | MidCap Financial vs. GRENKELEASING Dusseldorf | MidCap Financial vs. JAPAN AIRLINES |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |