Correlation Between UJU Electronics and Xavis
Can any of the company-specific risk be diversified away by investing in both UJU Electronics and Xavis 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 UJU Electronics and Xavis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UJU Electronics Co and Xavis Co, you can compare the effects of market volatilities on UJU Electronics and Xavis 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 UJU Electronics with a short position of Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of UJU Electronics and Xavis.
Diversification Opportunities for UJU Electronics and Xavis
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UJU and Xavis is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding UJU Electronics Co and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis and UJU Electronics 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 UJU Electronics Co are associated (or correlated) with Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of UJU Electronics i.e., UJU Electronics and Xavis go up and down completely randomly.
Pair Corralation between UJU Electronics and Xavis
Assuming the 90 days trading horizon UJU Electronics Co is expected to generate 0.81 times more return on investment than Xavis. However, UJU Electronics Co is 1.23 times less risky than Xavis. It trades about 0.22 of its potential returns per unit of risk. Xavis Co is currently generating about 0.1 per unit of risk. If you would invest 1,690,000 in UJU Electronics Co on December 30, 2024 and sell it today you would earn a total of 910,000 from holding UJU Electronics Co or generate 53.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
UJU Electronics Co vs. Xavis Co
Performance |
Timeline |
UJU Electronics |
Xavis |
UJU Electronics and Xavis Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UJU Electronics and Xavis
The main advantage of trading using opposite UJU Electronics and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UJU Electronics position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.UJU Electronics vs. Kyeryong Construction Industrial | UJU Electronics vs. Samsung Publishing Co | UJU Electronics vs. Ssangyong Information Communication | UJU Electronics vs. SK Telecom Co |
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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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