Correlation Between Global Unichip and Anpec Electronics
Can any of the company-specific risk be diversified away by investing in both Global Unichip and Anpec Electronics 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 Anpec Electronics 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 Anpec Electronics, you can compare the effects of market volatilities on Global Unichip and Anpec Electronics 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 Anpec Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Unichip and Anpec Electronics.
Diversification Opportunities for Global Unichip and Anpec Electronics
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Anpec is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Global Unichip Corp and Anpec Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anpec Electronics 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 Anpec Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anpec Electronics has no effect on the direction of Global Unichip i.e., Global Unichip and Anpec Electronics go up and down completely randomly.
Pair Corralation between Global Unichip and Anpec Electronics
Assuming the 90 days trading horizon Global Unichip Corp is expected to generate 1.37 times more return on investment than Anpec Electronics. However, Global Unichip is 1.37 times more volatile than Anpec Electronics. It trades about 0.05 of its potential returns per unit of risk. Anpec Electronics is currently generating about 0.03 per unit of risk. If you would invest 76,100 in Global Unichip Corp on August 26, 2024 and sell it today you would earn a total of 48,400 from holding Global Unichip Corp or generate 63.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Unichip Corp vs. Anpec Electronics
Performance |
| Timeline |
| Global Unichip Corp |
| Anpec Electronics |
Global Unichip and Anpec Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Unichip and Anpec Electronics
The main advantage of trading using opposite Global Unichip and Anpec Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Unichip position performs unexpectedly, Anpec Electronics 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 Anpec Electronics will offset losses from the drop in Anpec Electronics' long position.| Global Unichip vs. Novatek Microelectronics Corp | Global Unichip vs. Quanta Computer | Global Unichip vs. United Microelectronics |
| Anpec Electronics vs. Global Unichip Corp | Anpec Electronics vs. Asmedia Technology | Anpec Electronics vs. Unimicron Technology Corp | Anpec Electronics 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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