Correlation Between UNISEM and Posco Chemical
Can any of the company-specific risk be diversified away by investing in both UNISEM and Posco Chemical 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 UNISEM and Posco Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and Posco Chemical Co, you can compare the effects of market volatilities on UNISEM and Posco Chemical 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 UNISEM with a short position of Posco Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and Posco Chemical.
Diversification Opportunities for UNISEM and Posco Chemical
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UNISEM and Posco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and Posco Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posco Chemical and UNISEM 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 UNISEM Co are associated (or correlated) with Posco Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posco Chemical has no effect on the direction of UNISEM i.e., UNISEM and Posco Chemical go up and down completely randomly.
Pair Corralation between UNISEM and Posco Chemical
Assuming the 90 days trading horizon UNISEM Co is expected to generate 0.9 times more return on investment than Posco Chemical. However, UNISEM Co is 1.11 times less risky than Posco Chemical. It trades about -0.14 of its potential returns per unit of risk. Posco Chemical Co is currently generating about -0.21 per unit of risk. If you would invest 735,000 in UNISEM Co on September 13, 2024 and sell it today you would lose (155,000) from holding UNISEM Co or give up 21.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNISEM Co vs. Posco Chemical Co
Performance |
| Timeline |
| UNISEM |
| Posco Chemical |
UNISEM and Posco Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and Posco Chemical
The main advantage of trading using opposite UNISEM and Posco Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, Posco Chemical 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 Posco Chemical will offset losses from the drop in Posco Chemical's long position.| UNISEM vs. Jb Financial | UNISEM vs. BGF Retail Co | UNISEM vs. DB Insurance Co | UNISEM vs. Shinhan Financial Group |
| Posco Chemical vs. Dong A Steel Technology | Posco Chemical vs. Netmarble Games Corp | Posco Chemical vs. Guyoung Technology Co | Posco Chemical vs. Hwangkum Steel Technology |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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