Correlation Between Global Unichip and ITE Tech
Can any of the company-specific risk be diversified away by investing in both Global Unichip and ITE Tech 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 Global Unichip and ITE Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Unichip Corp and ITE Tech, you can compare the effects of market volatilities on Global Unichip and ITE Tech 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 Global Unichip with a short position of ITE Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Unichip and ITE Tech.
Diversification Opportunities for Global Unichip and ITE Tech
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and ITE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Global Unichip Corp and ITE Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITE Tech and Global Unichip 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 Global Unichip Corp are associated (or correlated) with ITE Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITE Tech has no effect on the direction of Global Unichip i.e., Global Unichip and ITE Tech go up and down completely randomly.
Pair Corralation between Global Unichip and ITE Tech
Assuming the 90 days trading horizon Global Unichip Corp is expected to under-perform the ITE Tech. In addition to that, Global Unichip is 1.54 times more volatile than ITE Tech. It trades about -0.05 of its total potential returns per unit of risk. ITE Tech is currently generating about -0.06 per unit of volatility. If you would invest 17,100 in ITE Tech on September 1, 2024 and sell it today you would lose (3,050) from holding ITE Tech or give up 17.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Global Unichip Corp vs. ITE Tech
Performance |
| Timeline |
| Global Unichip Corp |
| ITE Tech |
Global Unichip and ITE Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Unichip and ITE Tech
The main advantage of trading using opposite Global Unichip and ITE Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Unichip position performs unexpectedly, ITE Tech 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 ITE Tech will offset losses from the drop in ITE Tech's long position.| Global Unichip vs. Alchip Technologies | Global Unichip vs. Realtek Semiconductor Corp | Global Unichip vs. Faraday Technology Corp | Global Unichip vs. Novatek Microelectronics Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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