Correlation Between 3M and UOBSP
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By analyzing existing cross correlation between 3M Company and UOBSP 3863 07 OCT 32, you can compare the effects of market volatilities on 3M and UOBSP 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 3M with a short position of UOBSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and UOBSP.
Diversification Opportunities for 3M and UOBSP
Very good diversification
The 3 months correlation between 3M and UOBSP is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and UOBSP 3863 07 OCT 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UOBSP 3863 07 and 3M 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 3M Company are associated (or correlated) with UOBSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UOBSP 3863 07 has no effect on the direction of 3M i.e., 3M and UOBSP go up and down completely randomly.
Pair Corralation between 3M and UOBSP
Considering the 90-day investment horizon 3M Company is expected to generate 3.85 times more return on investment than UOBSP. However, 3M is 3.85 times more volatile than UOBSP 3863 07 OCT 32. It trades about 0.08 of its potential returns per unit of risk. UOBSP 3863 07 OCT 32 is currently generating about 0.14 per unit of risk. If you would invest 7,891 in 3M Company on September 12, 2024 and sell it today you would earn a total of 5,102 from holding 3M Company or generate 64.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 18.43% |
| Values | Daily Returns |
3M Company vs. UOBSP 3863 07 OCT 32
Performance |
| Timeline |
| 3M Company |
| UOBSP 3863 07 |
3M and UOBSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and UOBSP
The main advantage of trading using opposite 3M and UOBSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, UOBSP 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 UOBSP will offset losses from the drop in UOBSP's long position.| 3M vs. Victory Integrity Smallmid Cap | 3M vs. Hilton Worldwide Holdings | 3M vs. NVIDIA | 3M vs. JPMorgan Chase Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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