Correlation Between U Ming and Kung Sing
Can any of the company-specific risk be diversified away by investing in both U Ming and Kung Sing 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 Kung Sing 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 Kung Sing Engineering, you can compare the effects of market volatilities on U Ming and Kung Sing 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 Kung Sing. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and Kung Sing.
Diversification Opportunities for U Ming and Kung Sing
Poor diversification
The 3 months correlation between 2606 and Kung is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and Kung Sing Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kung Sing Engineering 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 Kung Sing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kung Sing Engineering has no effect on the direction of U Ming i.e., U Ming and Kung Sing go up and down completely randomly.
Pair Corralation between U Ming and Kung Sing
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 1.62 times more return on investment than Kung Sing. However, U Ming is 1.62 times more volatile than Kung Sing Engineering. It trades about 0.17 of its potential returns per unit of risk. Kung Sing Engineering is currently generating about 0.04 per unit of risk. If you would invest 5,790 in U Ming Marine Transport on December 5, 2024 and sell it today you would earn a total of 1,730 from holding U Ming Marine Transport or generate 29.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.21% |
Values | Daily Returns |
U Ming Marine Transport vs. Kung Sing Engineering
Performance |
Timeline |
U Ming Marine |
Kung Sing Engineering |
U Ming and Kung Sing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with U Ming and Kung Sing
The main advantage of trading using opposite U Ming and Kung Sing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, Kung Sing 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 Kung Sing will offset losses from the drop in Kung Sing'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 |
Kung Sing vs. Chien Kuo Construction | Kung Sing vs. Kee Tai Properties | Kung Sing vs. Grand Pacific Petrochemical | Kung Sing vs. BES Engineering Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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