Correlation Between UNISEM and Starbucks
Can any of the company-specific risk be diversified away by investing in both UNISEM and Starbucks 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 Starbucks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and Starbucks, you can compare the effects of market volatilities on UNISEM and Starbucks 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 Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and Starbucks.
Diversification Opportunities for UNISEM and Starbucks
Poor diversification
The 3 months correlation between UNISEM and Starbucks is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks 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 Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of UNISEM i.e., UNISEM and Starbucks go up and down completely randomly.
Pair Corralation between UNISEM and Starbucks
Assuming the 90 days trading horizon UNISEM Co is expected to generate 0.77 times more return on investment than Starbucks. However, UNISEM Co is 1.29 times less risky than Starbucks. It trades about -0.23 of its potential returns per unit of risk. Starbucks is currently generating about -0.23 per unit of risk. If you would invest 698,000 in UNISEM Co on January 23, 2025 and sell it today you would lose (102,000) from holding UNISEM Co or give up 14.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.96% |
| Values | Daily Returns |
UNISEM Co vs. Starbucks
Performance |
| Timeline |
| UNISEM |
| Starbucks |
UNISEM and Starbucks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNISEM and Starbucks
The main advantage of trading using opposite UNISEM and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' long position.| UNISEM vs. Vissem Electronics Co | UNISEM vs. DAEDUCK ELECTRONICS CoLtd | UNISEM vs. Daeduck Electronics Co | UNISEM vs. Jinro Distillers Co |
| Starbucks vs. Applied Materials | Starbucks vs. FibraHotel | Starbucks vs. Grupo Sports World | Starbucks vs. Prudential Financial |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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