Correlation Between UNISEM and ICD
Can any of the company-specific risk be diversified away by investing in both UNISEM and ICD 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 ICD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and ICD Co, you can compare the effects of market volatilities on UNISEM and ICD 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 ICD. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and ICD.
Diversification Opportunities for UNISEM and ICD
Poor diversification
The 3 months correlation between UNISEM and ICD is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and ICD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICD Co 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 ICD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICD Co has no effect on the direction of UNISEM i.e., UNISEM and ICD go up and down completely randomly.
Pair Corralation between UNISEM and ICD
Assuming the 90 days trading horizon UNISEM Co is expected to under-perform the ICD. In addition to that, UNISEM is 1.31 times more volatile than ICD Co. It trades about -0.3 of its total potential returns per unit of risk. ICD Co is currently generating about -0.28 per unit of volatility. If you would invest 524,000 in ICD Co on August 24, 2024 and sell it today you would lose (76,500) from holding ICD Co or give up 14.6% 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. ICD Co
Performance |
| Timeline |
| UNISEM |
| ICD Co |
UNISEM and ICD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and ICD
The main advantage of trading using opposite UNISEM and ICD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, ICD 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 ICD will offset losses from the drop in ICD's long position.| UNISEM vs. Shinsegae Food | UNISEM vs. Seoul Food Industrial | UNISEM vs. HB Technology TD | UNISEM vs. Zaram Technology |
| ICD vs. Samsung Electronics Co | ICD vs. Samsung Electronics Co | ICD vs. LG Energy Solution | ICD vs. SK Hynix |
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.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |