Correlation Between U Tech and Excellence Optoelectronic

Can any of the company-specific risk be diversified away by investing in both U Tech and Excellence Optoelectronic 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 Excellence Optoelectronic 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 Excellence Optoelectronic, you can compare the effects of market volatilities on U Tech and Excellence Optoelectronic 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 Excellence Optoelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Tech and Excellence Optoelectronic.

Diversification Opportunities for U Tech and Excellence Optoelectronic

0.79

Correlation Coefficient

U Tech  Excellence Optoelectronic

Poor diversification

The 3 months correlation between 3050 and Excellence is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding U Tech Media Corp and Excellence Optoelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excellence Optoelectronic 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 Excellence Optoelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excellence Optoelectronic has no effect on the direction of U Tech i.e., U Tech and Excellence Optoelectronic go up and down completely randomly.

Pair Corralation between U Tech and Excellence Optoelectronic

Assuming the 90 days trading horizon U Tech Media Corp is expected to under-perform the Excellence Optoelectronic. But the stock apears to be less risky and, when comparing its historical volatility, U Tech Media Corp is 1.19 times less risky than Excellence Optoelectronic. The stock trades about -0.13 of its potential returns per unit of risk. The Excellence Optoelectronic is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  2,680  in Excellence Optoelectronic on December 30, 2024 and sell it today you would lose (315.00) from holding Excellence Optoelectronic or give up 11.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

U Tech Media Corp  vs.  Excellence Optoelectronic

U Tech Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days U Tech Media Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Excellence Optoelectronic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Excellence Optoelectronic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with U Tech and Excellence Optoelectronic

The main advantage of trading using opposite U Tech and Excellence Optoelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Tech position performs unexpectedly, Excellence Optoelectronic 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 Excellence Optoelectronic will offset losses from the drop in Excellence Optoelectronic's long position.

The idea behind U Tech Media Corp and Excellence Optoelectronic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..