Correlation Between Global Unichip and Niching Industrial
Can any of the company-specific risk be diversified away by investing in both Global Unichip and Niching Industrial 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 Niching Industrial 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 Niching Industrial, you can compare the effects of market volatilities on Global Unichip and Niching Industrial 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 Niching Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Unichip and Niching Industrial.
Diversification Opportunities for Global Unichip and Niching Industrial
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Niching is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Global Unichip Corp and Niching Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niching Industrial 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 Niching Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niching Industrial has no effect on the direction of Global Unichip i.e., Global Unichip and Niching Industrial go up and down completely randomly.
Pair Corralation between Global Unichip and Niching Industrial
Assuming the 90 days trading horizon Global Unichip Corp is expected to under-perform the Niching Industrial. In addition to that, Global Unichip is 1.31 times more volatile than Niching Industrial. It trades about -0.02 of its total potential returns per unit of risk. Niching Industrial is currently generating about 0.01 per unit of volatility. If you would invest 8,256 in Niching Industrial on September 12, 2024 and sell it today you would lose (186.00) from holding Niching Industrial or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Unichip Corp vs. Niching Industrial
Performance |
| Timeline |
| Global Unichip Corp |
| Niching Industrial |
Global Unichip and Niching Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Unichip and Niching Industrial
The main advantage of trading using opposite Global Unichip and Niching Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Unichip position performs unexpectedly, Niching Industrial 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 Niching Industrial will offset losses from the drop in Niching Industrial's long position.| Global Unichip vs. AU Optronics | Global Unichip vs. Innolux Corp | Global Unichip vs. Ruentex Development Co | Global Unichip vs. WiseChip Semiconductor |
| Niching Industrial vs. Dimension Computer Technology | Niching Industrial vs. Kworld Computer Co | Niching Industrial vs. Ruentex Development Co | Niching Industrial vs. Symtek Automation Asia |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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