Correlation Between Global Unichip and Altek Corp
Can any of the company-specific risk be diversified away by investing in both Global Unichip and Altek Corp 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 Altek Corp 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 Altek Corp, you can compare the effects of market volatilities on Global Unichip and Altek Corp 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 Altek Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Unichip and Altek Corp.
Diversification Opportunities for Global Unichip and Altek Corp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Altek is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Global Unichip Corp and Altek Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altek Corp 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 Altek Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altek Corp has no effect on the direction of Global Unichip i.e., Global Unichip and Altek Corp go up and down completely randomly.
Pair Corralation between Global Unichip and Altek Corp
Assuming the 90 days trading horizon Global Unichip Corp is expected to generate 2.2 times more return on investment than Altek Corp. However, Global Unichip is 2.2 times more volatile than Altek Corp. It trades about 0.03 of its potential returns per unit of risk. Altek Corp is currently generating about -0.18 per unit of risk. If you would invest 118,000 in Global Unichip Corp on September 2, 2024 and sell it today you would earn a total of 1,000.00 from holding Global Unichip Corp or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Unichip Corp vs. Altek Corp
Performance |
| Timeline |
| Global Unichip Corp |
| Altek Corp |
Global Unichip and Altek Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Unichip and Altek Corp
The main advantage of trading using opposite Global Unichip and Altek Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Unichip position performs unexpectedly, Altek Corp 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 Altek Corp will offset losses from the drop in Altek Corp's long position.The idea behind Global Unichip Corp and Altek Corp 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.| Altek Corp vs. Chaintech Technology Corp | Altek Corp vs. Avision | Altek Corp vs. Clevo Co | Altek Corp vs. Elitegroup Computer Systems |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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