Correlation Between Pou Chen and Uni President
Can any of the company-specific risk be diversified away by investing in both Pou Chen and Uni President 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 Pou Chen and Uni President into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pou Chen Corp and Uni President Enterprises Corp, you can compare the effects of market volatilities on Pou Chen and Uni President 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 Pou Chen with a short position of Uni President. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pou Chen and Uni President.
Diversification Opportunities for Pou Chen and Uni President
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pou and Uni is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pou Chen Corp and Uni President Enterprises Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni President Enterp and Pou Chen 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 Pou Chen Corp are associated (or correlated) with Uni President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni President Enterp has no effect on the direction of Pou Chen i.e., Pou Chen and Uni President go up and down completely randomly.
Pair Corralation between Pou Chen and Uni President
Assuming the 90 days trading horizon Pou Chen Corp is expected to generate 1.44 times more return on investment than Uni President. However, Pou Chen is 1.44 times more volatile than Uni President Enterprises Corp. It trades about 0.06 of its potential returns per unit of risk. Uni President Enterprises Corp is currently generating about 0.05 per unit of risk. If you would invest 3,110 in Pou Chen Corp on September 11, 2024 and sell it today you would earn a total of 1,280 from holding Pou Chen Corp or generate 41.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.75% |
Values | Daily Returns |
Pou Chen Corp vs. Uni President Enterprises Corp
Performance |
Timeline |
Pou Chen Corp |
Uni President Enterp |
Pou Chen and Uni President Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pou Chen and Uni President
The main advantage of trading using opposite Pou Chen and Uni President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pou Chen position performs unexpectedly, Uni President 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 Uni President will offset losses from the drop in Uni President's long position.Pou Chen vs. Uni President Enterprises Corp | Pou Chen vs. Cheng Shin Rubber | Pou Chen vs. Far Eastern New | Pou Chen vs. Formosa Chemicals Fibre |
Uni President vs. President Chain Store | Uni President vs. Formosa Plastics Corp | Uni President vs. Nan Ya Plastics | Uni President vs. Taiwan Cement 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Transaction History View history of all your transactions and understand their impact on performance | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |