Correlation Between U Media and Cheng Fwa
Can any of the company-specific risk be diversified away by investing in both U Media and Cheng Fwa 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 Cheng Fwa 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 Cheng Fwa Industrial, you can compare the effects of market volatilities on U Media and Cheng Fwa 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 Cheng Fwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Media and Cheng Fwa.
Diversification Opportunities for U Media and Cheng Fwa
Average diversification
The 3 months correlation between 6470 and Cheng is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding U Media Communications and Cheng Fwa Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheng Fwa Industrial 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 Cheng Fwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheng Fwa Industrial has no effect on the direction of U Media i.e., U Media and Cheng Fwa go up and down completely randomly.
Pair Corralation between U Media and Cheng Fwa
Assuming the 90 days trading horizon U Media Communications is expected to generate 0.66 times more return on investment than Cheng Fwa. However, U Media Communications is 1.51 times less risky than Cheng Fwa. It trades about 0.01 of its potential returns per unit of risk. Cheng Fwa Industrial is currently generating about -0.09 per unit of risk. If you would invest 5,380 in U Media Communications on December 29, 2024 and sell it today you would earn a total of 20.00 from holding U Media Communications or generate 0.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
U Media Communications vs. Cheng Fwa Industrial
Performance |
Timeline |
U Media Communications |
Cheng Fwa Industrial |
U Media and Cheng Fwa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with U Media and Cheng Fwa
The main advantage of trading using opposite U Media and Cheng Fwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Media position performs unexpectedly, Cheng Fwa 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 Cheng Fwa will offset losses from the drop in Cheng Fwa's long position.U Media vs. STL Technology Co | U Media vs. Asmedia Technology | U Media vs. Chinese Maritime Transport | U Media vs. Intai Technology |
Cheng Fwa vs. Grand Ocean Retail | Cheng Fwa vs. Acelon Chemicals Fiber | Cheng Fwa vs. Holtek Semiconductor | Cheng Fwa vs. uPI Semiconductor Corp |
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 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..
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