Correlation Between Tootsie Roll and Uni President
Can any of the company-specific risk be diversified away by investing in both Tootsie Roll and Uni President 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 Tootsie Roll and Uni President into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tootsie Roll Industries and Uni President China Holdings, you can compare the effects of market volatilities on Tootsie Roll and Uni President 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 Tootsie Roll with a short position of Uni President. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tootsie Roll and Uni President.
Diversification Opportunities for Tootsie Roll and Uni President
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tootsie and Uni is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tootsie Roll Industries and Uni President China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni President China and Tootsie Roll 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 Tootsie Roll Industries are associated (or correlated) with Uni President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni President China has no effect on the direction of Tootsie Roll i.e., Tootsie Roll and Uni President go up and down completely randomly.
Pair Corralation between Tootsie Roll and Uni President
Allowing for the 90-day total investment horizon Tootsie Roll Industries is expected to generate 4.8 times more return on investment than Uni President. However, Tootsie Roll is 4.8 times more volatile than Uni President China Holdings. It trades about 0.11 of its potential returns per unit of risk. Uni President China Holdings is currently generating about 0.12 per unit of risk. If you would invest 3,028 in Tootsie Roll Industries on September 3, 2024 and sell it today you would earn a total of 282.00 from holding Tootsie Roll Industries or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Tootsie Roll Industries vs. Uni President China Holdings
Performance |
| Timeline |
| Tootsie Roll Industries |
| Uni President China |
Tootsie Roll and Uni President Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tootsie Roll and Uni President
The main advantage of trading using opposite Tootsie Roll and Uni President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tootsie Roll position performs unexpectedly, Uni President 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 Uni President will offset losses from the drop in Uni President's long position.| Tootsie Roll vs. Mondelez International | Tootsie Roll vs. Hershey Co | Tootsie Roll vs. Rocky Mountain Chocolate | Tootsie Roll vs. Chocoladefabriken Lindt Sprngli |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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