Correlation Between UET United and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both UET United and SERI INDUSTRIAL 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 UET United and SERI INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UET United Electronic and SERI INDUSTRIAL EO, you can compare the effects of market volatilities on UET United and SERI INDUSTRIAL 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 UET United with a short position of SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and SERI INDUSTRIAL.
Diversification Opportunities for UET United and SERI INDUSTRIAL
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UET and SERI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO and UET United 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 UET United Electronic are associated (or correlated) with SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of UET United i.e., UET United and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between UET United and SERI INDUSTRIAL
Assuming the 90 days trading horizon UET United Electronic is expected to generate 1.08 times more return on investment than SERI INDUSTRIAL. However, UET United is 1.08 times more volatile than SERI INDUSTRIAL EO. It trades about 0.07 of its potential returns per unit of risk. SERI INDUSTRIAL EO is currently generating about -0.15 per unit of risk. If you would invest 88.00 in UET United Electronic on December 28, 2024 and sell it today you would earn a total of 14.00 from holding UET United Electronic or generate 15.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
UET United Electronic vs. SERI INDUSTRIAL EO
Performance |
Timeline |
UET United Electronic |
SERI INDUSTRIAL EO |
UET United and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UET United and SERI INDUSTRIAL
The main advantage of trading using opposite UET United and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL's long position.UET United vs. Information Services International Dentsu | UET United vs. Data Modul AG | UET United vs. DATATEC LTD 2 | UET United vs. National Storage Affiliates |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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