Correlation Between Aba Chemicals and Union Semiconductor
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By analyzing existing cross correlation between Aba Chemicals Corp and Union Semiconductor Co, you can compare the effects of market volatilities on Aba Chemicals 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 Aba Chemicals with a short position of Union Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Union Semiconductor.
Diversification Opportunities for Aba Chemicals and Union Semiconductor
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aba and Union is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Union Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Semiconductor and Aba Chemicals 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 Aba Chemicals Corp 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 Aba Chemicals i.e., Aba Chemicals and Union Semiconductor go up and down completely randomly.
Pair Corralation between Aba Chemicals and Union Semiconductor
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Union Semiconductor. In addition to that, Aba Chemicals is 1.16 times more volatile than Union Semiconductor Co. It trades about -0.01 of its total potential returns per unit of risk. Union Semiconductor Co is currently generating about 0.0 per unit of volatility. If you would invest 1,088 in Union Semiconductor Co on September 12, 2024 and sell it today you would lose (163.00) from holding Union Semiconductor Co or give up 14.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Union Semiconductor Co
Performance |
| Timeline |
| Aba Chemicals Corp |
| Union Semiconductor |
Aba Chemicals and Union Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Union Semiconductor
The main advantage of trading using opposite Aba Chemicals and Union Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals 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.| Aba Chemicals vs. Semiconductor Manufacturing Electronics | Aba Chemicals vs. GigaDevice SemiconductorBeiji | Aba Chemicals vs. Qinghaihuading Industrial Co | Aba Chemicals vs. MayAir Technology Co |
| Union Semiconductor vs. Gansu Jiu Steel | Union Semiconductor vs. Shandong Mining Machinery | Union Semiconductor vs. Aba Chemicals Corp | Union Semiconductor vs. BlueFocus Communication Group |
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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