Correlation Between UNISEM and Cafe24 Corp
Can any of the company-specific risk be diversified away by investing in both UNISEM and Cafe24 Corp 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 Cafe24 Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and Cafe24 Corp, you can compare the effects of market volatilities on UNISEM and Cafe24 Corp 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 Cafe24 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and Cafe24 Corp.
Diversification Opportunities for UNISEM and Cafe24 Corp
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UNISEM and Cafe24 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and Cafe24 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cafe24 Corp 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 Cafe24 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cafe24 Corp has no effect on the direction of UNISEM i.e., UNISEM and Cafe24 Corp go up and down completely randomly.
Pair Corralation between UNISEM and Cafe24 Corp
Assuming the 90 days trading horizon UNISEM Co is expected to under-perform the Cafe24 Corp. But the stock apears to be less risky and, when comparing its historical volatility, UNISEM Co is 2.15 times less risky than Cafe24 Corp. The stock trades about -0.27 of its potential returns per unit of risk. The Cafe24 Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,405,000 in Cafe24 Corp on September 1, 2024 and sell it today you would earn a total of 910,000 from holding Cafe24 Corp or generate 37.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNISEM Co vs. Cafe24 Corp
Performance |
| Timeline |
| UNISEM |
| Cafe24 Corp |
UNISEM and Cafe24 Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and Cafe24 Corp
The main advantage of trading using opposite UNISEM and Cafe24 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, Cafe24 Corp 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 Cafe24 Corp will offset losses from the drop in Cafe24 Corp's long position.| UNISEM vs. Shinsegae Information Communication | UNISEM vs. Dongbu Insurance Co | UNISEM vs. Daejoo Electronic Materials | UNISEM vs. Shinil Electronics Co |
| Cafe24 Corp vs. RF Materials Co | Cafe24 Corp vs. Phoenix Materials Co | Cafe24 Corp vs. Wonil Special Steel | Cafe24 Corp vs. Daehan 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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