Correlation Between United Integrated and Kuo Toong

Can any of the company-specific risk be diversified away by investing in both United Integrated and Kuo Toong 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 United Integrated and Kuo Toong into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between United Integrated Services and Kuo Toong International, you can compare the effects of market volatilities on United Integrated and Kuo Toong 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 United Integrated with a short position of Kuo Toong. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Integrated and Kuo Toong.

Diversification Opportunities for United Integrated and Kuo Toong

-0.84

Correlation Coefficient

United Integrated  Kuo Toong

Pay attention - limited upside

The 3 months correlation between United and Kuo is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding United Integrated Services and Kuo Toong International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuo Toong International and United Integrated 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 United Integrated Services are associated (or correlated) with Kuo Toong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuo Toong International has no effect on the direction of United Integrated i.e., United Integrated and Kuo Toong go up and down completely randomly.

Pair Corralation between United Integrated and Kuo Toong

Assuming the 90 days trading horizon United Integrated Services is expected to generate 0.91 times more return on investment than Kuo Toong. However, United Integrated Services is 1.1 times less risky than Kuo Toong. It trades about 0.26 of its potential returns per unit of risk. Kuo Toong International is currently generating about -0.12 per unit of risk. If you would invest  33,800  in United Integrated Services on September 12, 2024 and sell it today you would earn a total of  11,800  from holding United Integrated Services or generate 34.91% return on investment over 90 days.

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

United Integrated Services  vs.  Kuo Toong International

United Integrated

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United Integrated Services are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, United Integrated showed solid returns over the last few months and may actually be approaching a breakup point.

Kuo Toong International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kuo Toong International 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 United Integrated and Kuo Toong

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

The idea behind United Integrated Services and Kuo Toong International 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.