Correlation Between BlueFocus Communication and Union Semiconductor
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By analyzing existing cross correlation between BlueFocus Communication Group and Union Semiconductor Co, you can compare the effects of market volatilities on BlueFocus Communication and Union Semiconductor 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 BlueFocus Communication with a short position of Union Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueFocus Communication and Union Semiconductor.
Diversification Opportunities for BlueFocus Communication and Union Semiconductor
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BlueFocus and Union is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BlueFocus Communication Group and Union Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Semiconductor and BlueFocus Communication 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 BlueFocus Communication Group are associated (or correlated) with Union Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Semiconductor has no effect on the direction of BlueFocus Communication i.e., BlueFocus Communication and Union Semiconductor go up and down completely randomly.
Pair Corralation between BlueFocus Communication and Union Semiconductor
Assuming the 90 days trading horizon BlueFocus Communication Group is expected to generate 1.41 times more return on investment than Union Semiconductor. However, BlueFocus Communication is 1.41 times more volatile than Union Semiconductor Co. It trades about 0.06 of its potential returns per unit of risk. Union Semiconductor Co is currently generating about 0.0 per unit of risk. If you would invest 486.00 in BlueFocus Communication Group on September 12, 2024 and sell it today you would earn a total of 674.00 from holding BlueFocus Communication Group or generate 138.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlueFocus Communication Group vs. Union Semiconductor Co
Performance |
| Timeline |
| BlueFocus Communication |
| Union Semiconductor |
BlueFocus Communication and Union Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueFocus Communication and Union Semiconductor
The main advantage of trading using opposite BlueFocus Communication and Union Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueFocus Communication position performs unexpectedly, Union Semiconductor 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 Union Semiconductor will offset losses from the drop in Union Semiconductor's long position.The idea behind BlueFocus Communication Group and Union Semiconductor Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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