Correlation Between U Media and Brogent Technologies

Can any of the company-specific risk be diversified away by investing in both U Media and Brogent Technologies 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 Media and Brogent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between U Media Communications and Brogent Technologies, you can compare the effects of market volatilities on U Media and Brogent Technologies 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 Media with a short position of Brogent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Brogent Technologies.

Diversification Opportunities for U Media and Brogent Technologies

-0.15

Correlation Coefficient

U Media  Brogent Technologies

Good diversification

The 3 months correlation between 6470 and Brogent is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Brogent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brogent Technologies and U Media 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 Media Communications are associated (or correlated) with Brogent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brogent Technologies has no effect on the direction of U Media i.e., U Media and Brogent Technologies go up and down completely randomly.

Pair Corralation between U Media and Brogent Technologies

Assuming the 90 days trading horizon U Media Communications is expected to generate 2.08 times more return on investment than Brogent Technologies. However, U Media is 2.08 times more volatile than Brogent Technologies. It trades about 0.09 of its potential returns per unit of risk. Brogent Technologies is currently generating about -0.27 per unit of risk. If you would invest  5,130  in U Media Communications on September 28, 2024 and sell it today you would earn a total of  320.00  from holding U Media Communications or generate 6.24% return on investment over 90 days.

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

U Media Communications  vs.  Brogent Technologies

U Media Communications

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in U Media Communications are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, U Media may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Brogent Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brogent Technologies 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with U Media and Brogent Technologies

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

The idea behind U Media Communications and Brogent Technologies 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.