Correlation Between UET United and China Pacific
Can any of the company-specific risk be diversified away by investing in both UET United and China Pacific 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 China Pacific 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 China Pacific Insurance, you can compare the effects of market volatilities on UET United and China Pacific 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 China Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and China Pacific.
Diversification Opportunities for UET United and China Pacific
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UET and China is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and China Pacific Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Pacific Insurance 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 China Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Pacific Insurance has no effect on the direction of UET United i.e., UET United and China Pacific go up and down completely randomly.
Pair Corralation between UET United and China Pacific
Assuming the 90 days trading horizon UET United Electronic is expected to generate 2.78 times more return on investment than China Pacific. However, UET United is 2.78 times more volatile than China Pacific Insurance. It trades about 0.06 of its potential returns per unit of risk. China Pacific Insurance is currently generating about -0.05 per unit of risk. If you would invest 91.00 in UET United Electronic on November 2, 2024 and sell it today you would earn a total of 4.00 from holding UET United Electronic or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UET United Electronic vs. China Pacific Insurance
Performance |
| Timeline |
| UET United Electronic |
| China Pacific Insurance |
UET United and China Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and China Pacific
The main advantage of trading using opposite UET United and China Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, China Pacific 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 China Pacific will offset losses from the drop in China Pacific's long position.| UET United vs. MTY Food Group | UET United vs. CarsalesCom | UET United vs. Cal Maine Foods | UET United vs. Lamar Advertising |
| China Pacific vs. Check Point Software | China Pacific vs. Ribbon Communications | China Pacific vs. Computershare Limited | China Pacific vs. Charter Communications |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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