Correlation Between Global Unichip and Andes Technology
Can any of the company-specific risk be diversified away by investing in both Global Unichip and Andes Technology 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 Andes Technology 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 Andes Technology Corp, you can compare the effects of market volatilities on Global Unichip and Andes Technology 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 Andes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Unichip and Andes Technology.
Diversification Opportunities for Global Unichip and Andes Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Andes is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Global Unichip Corp and Andes Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andes Technology 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 Andes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andes Technology Corp has no effect on the direction of Global Unichip i.e., Global Unichip and Andes Technology go up and down completely randomly.
Pair Corralation between Global Unichip and Andes Technology
Assuming the 90 days trading horizon Global Unichip Corp is expected to generate 1.25 times more return on investment than Andes Technology. However, Global Unichip is 1.25 times more volatile than Andes Technology Corp. It trades about 0.0 of its potential returns per unit of risk. Andes Technology Corp is currently generating about 0.0 per unit of risk. If you would invest 141,000 in Global Unichip Corp on August 25, 2024 and sell it today you would lose (16,500) from holding Global Unichip Corp or give up 11.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Unichip Corp vs. Andes Technology Corp
Performance |
| Timeline |
| Global Unichip Corp |
| Andes Technology Corp |
Global Unichip and Andes Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Unichip and Andes Technology
The main advantage of trading using opposite Global Unichip and Andes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Unichip position performs unexpectedly, Andes Technology 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 Andes Technology will offset losses from the drop in Andes Technology's long position.| Global Unichip vs. Alchip Technologies | Global Unichip vs. Realtek Semiconductor Corp | Global Unichip vs. Faraday Technology Corp | Global Unichip vs. Novatek Microelectronics Corp |
| Andes Technology vs. Global Unichip Corp | Andes Technology vs. Asmedia Technology | Andes Technology vs. Unimicron Technology Corp | Andes Technology 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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