Correlation Between UNISEM and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both UNISEM and KMH Hitech 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 KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and KMH Hitech Co, you can compare the effects of market volatilities on UNISEM and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and KMH Hitech.
Diversification Opportunities for UNISEM and KMH Hitech
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UNISEM and KMH is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of UNISEM i.e., UNISEM and KMH Hitech go up and down completely randomly.
Pair Corralation between UNISEM and KMH Hitech
Assuming the 90 days trading horizon UNISEM is expected to generate 1.12 times less return on investment than KMH Hitech. In addition to that, UNISEM is 1.64 times more volatile than KMH Hitech Co. It trades about 0.25 of its total potential returns per unit of risk. KMH Hitech Co is currently generating about 0.46 per unit of volatility. If you would invest 85,300 in KMH Hitech Co on October 13, 2024 and sell it today you would earn a total of 10,300 from holding KMH Hitech Co or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNISEM Co vs. KMH Hitech Co
Performance |
| Timeline |
| UNISEM |
| KMH Hitech |
UNISEM and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and KMH Hitech
The main advantage of trading using opposite UNISEM and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| UNISEM vs. SBI Investment KOREA | UNISEM vs. Woori Technology Investment | UNISEM vs. GS Retail Co | UNISEM vs. Asiana Airlines |
| KMH Hitech vs. Hyundai Home Shopping | KMH Hitech vs. Samyang Foods Co | KMH Hitech vs. Innowireless Co | KMH Hitech vs. Mobileleader CoLtd |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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