Correlation Between UNISEM and Choil Aluminum
Can any of the company-specific risk be diversified away by investing in both UNISEM and Choil Aluminum 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 Choil Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and Choil Aluminum, you can compare the effects of market volatilities on UNISEM and Choil Aluminum 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 Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and Choil Aluminum.
Diversification Opportunities for UNISEM and Choil Aluminum
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UNISEM and Choil is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum 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 Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of UNISEM i.e., UNISEM and Choil Aluminum go up and down completely randomly.
Pair Corralation between UNISEM and Choil Aluminum
Assuming the 90 days trading horizon UNISEM Co is expected to under-perform the Choil Aluminum. In addition to that, UNISEM is 1.04 times more volatile than Choil Aluminum. It trades about -0.27 of its total potential returns per unit of risk. Choil Aluminum is currently generating about -0.14 per unit of volatility. If you would invest 165,900 in Choil Aluminum on August 28, 2024 and sell it today you would lose (12,700) from holding Choil Aluminum or give up 7.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNISEM Co vs. Choil Aluminum
Performance |
| Timeline |
| UNISEM |
| Choil Aluminum |
UNISEM and Choil Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and Choil Aluminum
The main advantage of trading using opposite UNISEM and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum's long position.| UNISEM vs. Korea Real Estate | UNISEM vs. Korea Ratings Co | UNISEM vs. IQuest Co | UNISEM vs. Wonbang Tech Co |
| Choil Aluminum vs. Hankuk Steel Wire | Choil Aluminum vs. Cuckoo Homesys Co | Choil Aluminum vs. Kukdong Oil Chemicals | Choil Aluminum vs. Hanil Iron Steel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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