Correlation Between U Ming and FSP Technology
Can any of the company-specific risk be diversified away by investing in both U Ming and FSP Technology 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 U Ming and FSP Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Ming Marine Transport and FSP Technology, you can compare the effects of market volatilities on U Ming and FSP Technology 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 U Ming with a short position of FSP Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and FSP Technology.
Diversification Opportunities for U Ming and FSP Technology
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2606 and FSP is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and FSP Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSP Technology and U Ming 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 U Ming Marine Transport are associated (or correlated) with FSP Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSP Technology has no effect on the direction of U Ming i.e., U Ming and FSP Technology go up and down completely randomly.
Pair Corralation between U Ming and FSP Technology
Assuming the 90 days trading horizon U Ming is expected to generate 1.59 times less return on investment than FSP Technology. In addition to that, U Ming is 1.15 times more volatile than FSP Technology. It trades about 0.03 of its total potential returns per unit of risk. FSP Technology is currently generating about 0.05 per unit of volatility. If you would invest 4,580 in FSP Technology on December 4, 2024 and sell it today you would earn a total of 2,490 from holding FSP Technology or generate 54.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.79% |
Values | Daily Returns |
U Ming Marine Transport vs. FSP Technology
Performance |
Timeline |
U Ming Marine |
FSP Technology |
U Ming and FSP Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with U Ming and FSP Technology
The main advantage of trading using opposite U Ming and FSP Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, FSP Technology 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 FSP Technology will offset losses from the drop in FSP Technology's long position.U Ming vs. Sincere Navigation Corp | U Ming vs. Wan Hai Lines | U Ming vs. Yang Ming Marine | U Ming vs. Formosa Chemicals Fibre |
FSP Technology vs. Wah Lee Industrial | FSP Technology vs. Sinbon Electronics Co | FSP Technology vs. Acbel Polytech | FSP Technology vs. TXC Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |