Correlation Between Stock Exchange and United Hero
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and United Hero 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 Stock Exchange and United Hero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and United Hero ETF, you can compare the effects of market volatilities on Stock Exchange and United Hero 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 Stock Exchange with a short position of United Hero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and United Hero.
Diversification Opportunities for Stock Exchange and United Hero
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stock and United is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and United Hero ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Hero ETF and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with United Hero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Hero ETF has no effect on the direction of Stock Exchange i.e., Stock Exchange and United Hero go up and down completely randomly.
Pair Corralation between Stock Exchange and United Hero
Assuming the 90 days trading horizon Stock Exchange is expected to generate 1560.64 times less return on investment than United Hero. But when comparing it to its historical volatility, Stock Exchange Of is 245.08 times less risky than United Hero. It trades about 0.02 of its potential returns per unit of risk. United Hero ETF is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 710.00 in United Hero ETF on September 2, 2024 and sell it today you would earn a total of 107.00 from holding United Hero ETF or generate 15.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stock Exchange Of vs. United Hero ETF
Performance |
| Timeline |
Stock Exchange and United Hero Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
United Hero ETF
Pair trading matchups for United Hero
Pair Trading with Stock Exchange and United Hero
The main advantage of trading using opposite Stock Exchange and United Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, United Hero 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 United Hero will offset losses from the drop in United Hero's long position.| Stock Exchange vs. Central Retail | Stock Exchange vs. Interlink Communication Public | Stock Exchange vs. NSL Foods Public | Stock Exchange vs. Central Plaza Hotel |
| United Hero vs. BCAP MSCI Thailand | United Hero vs. BCAP SET100 | United Hero vs. KTAM Gold ETF | United Hero vs. WISE KTAM CSI |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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