Correlation Between Global Unichip and Ardentec
Can any of the company-specific risk be diversified away by investing in both Global Unichip and Ardentec 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 Ardentec 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 Ardentec, you can compare the effects of market volatilities on Global Unichip and Ardentec 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 Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Unichip and Ardentec.
Diversification Opportunities for Global Unichip and Ardentec
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Ardentec is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Global Unichip Corp and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec 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 Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of Global Unichip i.e., Global Unichip and Ardentec go up and down completely randomly.
Pair Corralation between Global Unichip and Ardentec
Assuming the 90 days trading horizon Global Unichip Corp is expected to generate 2.07 times more return on investment than Ardentec. However, Global Unichip is 2.07 times more volatile than Ardentec. It trades about 0.02 of its potential returns per unit of risk. Ardentec is currently generating about -0.04 per unit of risk. If you would invest 124,500 in Global Unichip Corp on September 13, 2024 and sell it today you would earn a total of 500.00 from holding Global Unichip Corp or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Unichip Corp vs. Ardentec
Performance |
| Timeline |
| Global Unichip Corp |
| Ardentec |
Global Unichip and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Unichip and Ardentec
The main advantage of trading using opposite Global Unichip and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Unichip position performs unexpectedly, Ardentec 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 Ardentec will offset losses from the drop in Ardentec's long position.| Global Unichip vs. AU Optronics | Global Unichip vs. Innolux Corp | Global Unichip vs. Ruentex Development Co | Global Unichip vs. WiseChip Semiconductor |
| Ardentec vs. Sheng Yu Steel | Ardentec vs. Sunspring Metal Corp | Ardentec vs. Jentech Precision Industrial | Ardentec vs. Taiwan Steel Union |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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