Correlation Between Global Unichip and Ko Ja
Can any of the company-specific risk be diversified away by investing in both Global Unichip and Ko Ja 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 Ko Ja 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 Ko Ja Cayman, you can compare the effects of market volatilities on Global Unichip and Ko Ja 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 Ko Ja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Unichip and Ko Ja.
Diversification Opportunities for Global Unichip and Ko Ja
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and 5215 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Global Unichip Corp and Ko Ja Cayman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ko Ja Cayman 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 Ko Ja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ko Ja Cayman has no effect on the direction of Global Unichip i.e., Global Unichip and Ko Ja go up and down completely randomly.
Pair Corralation between Global Unichip and Ko Ja
Assuming the 90 days trading horizon Global Unichip Corp is expected to generate 1.63 times more return on investment than Ko Ja. However, Global Unichip is 1.63 times more volatile than Ko Ja Cayman. It trades about 0.04 of its potential returns per unit of risk. Ko Ja Cayman is currently generating about 0.01 per unit of risk. If you would invest 79,400 in Global Unichip Corp on August 30, 2024 and sell it today you would earn a total of 38,600 from holding Global Unichip Corp or generate 48.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Unichip Corp vs. Ko Ja Cayman
Performance |
| Timeline |
| Global Unichip Corp |
| Ko Ja Cayman |
Global Unichip and Ko Ja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Unichip and Ko Ja
The main advantage of trading using opposite Global Unichip and Ko Ja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Unichip position performs unexpectedly, Ko Ja 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 Ko Ja will offset losses from the drop in Ko Ja's long position.The idea behind Global Unichip Corp and Ko Ja Cayman 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.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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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