Correlation Between U Tech and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both U Tech and Asia Electronic 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 Tech and Asia Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Tech Media Corp and Asia Electronic Material, you can compare the effects of market volatilities on U Tech and Asia Electronic 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 Tech with a short position of Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Tech and Asia Electronic.
Diversification Opportunities for U Tech and Asia Electronic
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 3050 and Asia is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding U Tech Media Corp and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material and U Tech 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 Tech Media Corp are associated (or correlated) with Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of U Tech i.e., U Tech and Asia Electronic go up and down completely randomly.
Pair Corralation between U Tech and Asia Electronic
Assuming the 90 days trading horizon U Tech Media Corp is expected to under-perform the Asia Electronic. In addition to that, U Tech is 1.4 times more volatile than Asia Electronic Material. It trades about -0.08 of its total potential returns per unit of risk. Asia Electronic Material is currently generating about -0.06 per unit of volatility. If you would invest 2,090 in Asia Electronic Material on December 3, 2024 and sell it today you would lose (90.00) from holding Asia Electronic Material or give up 4.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
U Tech Media Corp vs. Asia Electronic Material
Performance |
Timeline |
U Tech Media |
Asia Electronic Material |
U Tech and Asia Electronic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with U Tech and Asia Electronic
The main advantage of trading using opposite U Tech and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Tech position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic's long position.U Tech vs. Asia Optical Co | U Tech vs. HannsTouch Solution | U Tech vs. Optimax Technology Corp | U Tech vs. Bright Led Electronics |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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