Correlation Between Chinese Maritime and UPI Semiconductor

Can any of the company-specific risk be diversified away by investing in both Chinese Maritime and UPI Semiconductor 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 Chinese Maritime and UPI Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chinese Maritime Transport and uPI Semiconductor Corp, you can compare the effects of market volatilities on Chinese Maritime and UPI Semiconductor 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 Chinese Maritime with a short position of UPI Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Maritime and UPI Semiconductor.

Diversification Opportunities for Chinese Maritime and UPI Semiconductor

0.05

Correlation Coefficient

Chinese Maritime  UPI Semiconductor

Significant diversification

The 3 months correlation between Chinese and UPI is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Maritime Transport and uPI Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on uPI Semiconductor Corp and Chinese Maritime 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 Chinese Maritime Transport are associated (or correlated) with UPI Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of uPI Semiconductor Corp has no effect on the direction of Chinese Maritime i.e., Chinese Maritime and UPI Semiconductor go up and down completely randomly.

Pair Corralation between Chinese Maritime and UPI Semiconductor

Assuming the 90 days trading horizon Chinese Maritime Transport is expected to generate 1.0 times more return on investment than UPI Semiconductor. However, Chinese Maritime is 1.0 times more volatile than uPI Semiconductor Corp. It trades about 0.01 of its potential returns per unit of risk. uPI Semiconductor Corp is currently generating about -0.1 per unit of risk. If you would invest  4,300  in Chinese Maritime Transport on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Chinese Maritime Transport or generate 0.0% return on investment over 90 days.

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

Chinese Maritime Transport  vs.  uPI Semiconductor Corp

Chinese Maritime Tra

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chinese Maritime Transport has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Chinese Maritime is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

uPI Semiconductor Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days uPI Semiconductor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Chinese Maritime and UPI Semiconductor

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

The idea behind Chinese Maritime Transport and uPI Semiconductor Corp 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.