Correlation Between UNISEM and Keyang Electric
Can any of the company-specific risk be diversified away by investing in both UNISEM and Keyang Electric 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 Keyang Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and Keyang Electric Machinery, you can compare the effects of market volatilities on UNISEM and Keyang Electric 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 Keyang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and Keyang Electric.
Diversification Opportunities for UNISEM and Keyang Electric
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UNISEM and Keyang is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and Keyang Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyang Electric Machinery 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 Keyang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyang Electric Machinery has no effect on the direction of UNISEM i.e., UNISEM and Keyang Electric go up and down completely randomly.
Pair Corralation between UNISEM and Keyang Electric
Assuming the 90 days trading horizon UNISEM Co is expected to generate 1.71 times more return on investment than Keyang Electric. However, UNISEM is 1.71 times more volatile than Keyang Electric Machinery. It trades about -0.01 of its potential returns per unit of risk. Keyang Electric Machinery is currently generating about -0.03 per unit of risk. If you would invest 770,614 in UNISEM Co on September 4, 2024 and sell it today you would lose (194,614) from holding UNISEM Co or give up 25.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNISEM Co vs. Keyang Electric Machinery
Performance |
| Timeline |
| UNISEM |
| Keyang Electric Machinery |
UNISEM and Keyang Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and Keyang Electric
The main advantage of trading using opposite UNISEM and Keyang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, Keyang Electric 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 Keyang Electric will offset losses from the drop in Keyang Electric's long position.| UNISEM vs. Coloray International Investment | UNISEM vs. NH Investment Securities | UNISEM vs. DB Insurance Co | UNISEM vs. Total Soft Bank |
| Keyang Electric vs. Busan Industrial Co | Keyang Electric vs. UNISEM Co | Keyang Electric vs. RPBio Inc | Keyang Electric vs. Finebesteel |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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