Correlation Between Global Fashion and UET United
Can any of the company-specific risk be diversified away by investing in both Global Fashion and UET United 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 Global Fashion and UET United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Fashion Group and UET United Electronic, you can compare the effects of market volatilities on Global Fashion and UET United 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 Global Fashion with a short position of UET United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Fashion and UET United.
Diversification Opportunities for Global Fashion and UET United
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and UET is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Global Fashion Group and UET United Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UET United Electronic and Global Fashion 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 Global Fashion Group are associated (or correlated) with UET United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UET United Electronic has no effect on the direction of Global Fashion i.e., Global Fashion and UET United go up and down completely randomly.
Pair Corralation between Global Fashion and UET United
Assuming the 90 days trading horizon Global Fashion Group is expected to generate 2.49 times more return on investment than UET United. However, Global Fashion is 2.49 times more volatile than UET United Electronic. It trades about 0.16 of its potential returns per unit of risk. UET United Electronic is currently generating about -0.01 per unit of risk. If you would invest 23.00 in Global Fashion Group on November 29, 2024 and sell it today you would earn a total of 4.00 from holding Global Fashion Group or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Fashion Group vs. UET United Electronic
Performance |
| Timeline |
| Global Fashion Group |
| UET United Electronic |
Global Fashion and UET United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Fashion and UET United
The main advantage of trading using opposite Global Fashion and UET United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Fashion position performs unexpectedly, UET United 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 UET United will offset losses from the drop in UET United's long position.| Global Fashion vs. OFFICE DEPOT | Global Fashion vs. Aedas Homes SA | Global Fashion vs. ALERION CLEANPOWER | Global Fashion vs. Focus Home Interactive |
| UET United vs. MOVIE GAMES SA | UET United vs. CeoTronics AG | UET United vs. PENN NATL GAMING | UET United vs. AGF Management 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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