Correlation Between UET United and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both UET United and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on UET United and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and STORE ELECTRONIC.
Diversification Opportunities for UET United and STORE ELECTRONIC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UET and STORE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of UET United i.e., UET United and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between UET United and STORE ELECTRONIC
Assuming the 90 days trading horizon UET United Electronic is expected to generate 4.22 times more return on investment than STORE ELECTRONIC. However, UET United is 4.22 times more volatile than STORE ELECTRONIC. It trades about 0.16 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about -0.01 per unit of risk. If you would invest 81.00 in UET United Electronic on September 3, 2024 and sell it today you would earn a total of 16.00 from holding UET United Electronic or generate 19.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UET United Electronic vs. STORE ELECTRONIC
Performance |
| Timeline |
| UET United Electronic |
| STORE ELECTRONIC |
UET United and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and STORE ELECTRONIC
The main advantage of trading using opposite UET United and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| UET United vs. Cisco Systems | UET United vs. Cisco Systems | UET United vs. Motorola Solutions | UET United vs. Nokia |
| STORE ELECTRONIC vs. TOTAL GABON | STORE ELECTRONIC vs. Walgreens Boots Alliance | STORE ELECTRONIC vs. Peak Resources Limited |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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