Correlation Between U Ming and Sentronic International
Can any of the company-specific risk be diversified away by investing in both U Ming and Sentronic International 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 Sentronic International 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 Sentronic International, you can compare the effects of market volatilities on U Ming and Sentronic International 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 Sentronic International. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Sentronic International.
Diversification Opportunities for U Ming and Sentronic International
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 2606 and Sentronic is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Sentronic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentronic International 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 Sentronic International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentronic International has no effect on the direction of U Ming i.e., U Ming and Sentronic International go up and down completely randomly.
Pair Corralation between U Ming and Sentronic International
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 0.76 times more return on investment than Sentronic International. However, U Ming Marine Transport is 1.31 times less risky than Sentronic International. It trades about 0.07 of its potential returns per unit of risk. Sentronic International is currently generating about 0.0 per unit of risk. If you would invest 5,050 in U Ming Marine Transport on October 25, 2024 and sell it today you would earn a total of 700.00 from holding U Ming Marine Transport or generate 13.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
U Ming Marine Transport vs. Sentronic International
Performance |
Timeline |
U Ming Marine |
Sentronic International |
U Ming and Sentronic International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with U Ming and Sentronic International
The main advantage of trading using opposite U Ming and Sentronic International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Sentronic International 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 Sentronic International will offset losses from the drop in Sentronic International'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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