Correlation Between Ua Multimedia and BASE
Can any of the company-specific risk be diversified away by investing in both Ua Multimedia and BASE 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 Ua Multimedia and BASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ua Multimedia and BASE Inc, you can compare the effects of market volatilities on Ua Multimedia and BASE 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 Ua Multimedia with a short position of BASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ua Multimedia and BASE.
Diversification Opportunities for Ua Multimedia and BASE
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UAMM and BASE is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ua Multimedia and BASE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASE Inc and Ua Multimedia 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 Ua Multimedia are associated (or correlated) with BASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASE Inc has no effect on the direction of Ua Multimedia i.e., Ua Multimedia and BASE go up and down completely randomly.
Pair Corralation between Ua Multimedia and BASE
Given the investment horizon of 90 days Ua Multimedia is expected to generate 6.93 times more return on investment than BASE. However, Ua Multimedia is 6.93 times more volatile than BASE Inc. It trades about 0.07 of its potential returns per unit of risk. BASE Inc is currently generating about -0.16 per unit of risk. If you would invest 0.22 in Ua Multimedia on September 13, 2024 and sell it today you would lose (0.01) from holding Ua Multimedia or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ua Multimedia vs. BASE Inc
Performance |
| Timeline |
| Ua Multimedia |
| BASE Inc |
Ua Multimedia and BASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ua Multimedia and BASE
The main advantage of trading using opposite Ua Multimedia and BASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ua Multimedia position performs unexpectedly, BASE 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 BASE will offset losses from the drop in BASE's long position.| Ua Multimedia vs. Image Protect | Ua Multimedia vs. Wanderport Corp | Ua Multimedia vs. Imd Companies | Ua Multimedia vs. MDM Permian |
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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