Correlation Between UNISEM and MetaLabs
Can any of the company-specific risk be diversified away by investing in both UNISEM and MetaLabs 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 MetaLabs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and MetaLabs Co, you can compare the effects of market volatilities on UNISEM and MetaLabs 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 MetaLabs. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and MetaLabs.
Diversification Opportunities for UNISEM and MetaLabs
Very weak diversification
The 3 months correlation between UNISEM and MetaLabs is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and MetaLabs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaLabs 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 MetaLabs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaLabs has no effect on the direction of UNISEM i.e., UNISEM and MetaLabs go up and down completely randomly.
Pair Corralation between UNISEM and MetaLabs
Assuming the 90 days trading horizon UNISEM Co is expected to generate 0.75 times more return on investment than MetaLabs. However, UNISEM Co is 1.33 times less risky than MetaLabs. It trades about -0.19 of its potential returns per unit of risk. MetaLabs Co is currently generating about -0.21 per unit of risk. If you would invest 676,000 in UNISEM Co on August 31, 2024 and sell it today you would lose (70,000) from holding UNISEM Co or give up 10.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
UNISEM Co vs. MetaLabs Co
Performance |
| Timeline |
| UNISEM |
| MetaLabs |
UNISEM and MetaLabs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and MetaLabs
The main advantage of trading using opposite UNISEM and MetaLabs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, MetaLabs 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 MetaLabs will offset losses from the drop in MetaLabs' long position.| UNISEM vs. Namhae Chemical | UNISEM vs. LG Chemicals | UNISEM vs. iNtRON Biotechnology | UNISEM vs. Home Center Holdings |
| MetaLabs vs. Clean Science co | MetaLabs vs. Digital Power Communications | MetaLabs vs. Daishin Information Communications | MetaLabs vs. Korea Information Communications |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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