Correlation Between New Generation and UHF Logistics
Can any of the company-specific risk be diversified away by investing in both New Generation and UHF Logistics 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 New Generation and UHF Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Generation Consumer and UHF Logistics Group, you can compare the effects of market volatilities on New Generation and UHF Logistics 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 New Generation with a short position of UHF Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Generation and UHF Logistics.
Diversification Opportunities for New Generation and UHF Logistics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and UHF is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding New Generation Consumer and UHF Logistics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UHF Logistics Group and New Generation 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 New Generation Consumer are associated (or correlated) with UHF Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UHF Logistics Group has no effect on the direction of New Generation i.e., New Generation and UHF Logistics go up and down completely randomly.
Pair Corralation between New Generation and UHF Logistics
Given the investment horizon of 90 days New Generation Consumer is expected to generate 0.57 times more return on investment than UHF Logistics. However, New Generation Consumer is 1.74 times less risky than UHF Logistics. It trades about 0.01 of its potential returns per unit of risk. UHF Logistics Group is currently generating about 0.0 per unit of risk. If you would invest 0.06 in New Generation Consumer on November 3, 2024 and sell it today you would lose (0.01) from holding New Generation Consumer or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
New Generation Consumer vs. UHF Logistics Group
Performance |
| Timeline |
| New Generation Consumer |
| UHF Logistics Group |
New Generation and UHF Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Generation and UHF Logistics
The main advantage of trading using opposite New Generation and UHF Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Generation position performs unexpectedly, UHF Logistics 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 UHF Logistics will offset losses from the drop in UHF Logistics' long position.| New Generation vs. Xtra Energy Corp | New Generation vs. Arsenal Digital Holdings | New Generation vs. UHF Logistics Group | New Generation vs. XCana Petroleum |
| UHF Logistics vs. New Generation Consumer | UHF Logistics vs. Xtra Energy Corp | UHF Logistics vs. Arsenal Digital Holdings | UHF Logistics vs. Golden Star Acquisition |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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