Correlation Between Raontech and UNISEM
Can any of the company-specific risk be diversified away by investing in both Raontech and UNISEM 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 Raontech and UNISEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raontech and UNISEM Co, you can compare the effects of market volatilities on Raontech and UNISEM 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 Raontech with a short position of UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raontech and UNISEM.
Diversification Opportunities for Raontech and UNISEM
Very poor diversification
The 3 months correlation between Raontech and UNISEM is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Raontech and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM and Raontech 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 Raontech are associated (or correlated) with UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of Raontech i.e., Raontech and UNISEM go up and down completely randomly.
Pair Corralation between Raontech and UNISEM
Assuming the 90 days trading horizon Raontech is expected to under-perform the UNISEM. But the stock apears to be less risky and, when comparing its historical volatility, Raontech is 1.02 times less risky than UNISEM. The stock trades about -0.05 of its potential returns per unit of risk. The UNISEM Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 709,360 in UNISEM Co on September 26, 2024 and sell it today you would lose (115,360) from holding UNISEM Co or give up 16.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raontech vs. UNISEM Co
Performance |
| Timeline |
| Raontech |
| UNISEM |
Raontech and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raontech and UNISEM
The main advantage of trading using opposite Raontech and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raontech position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| Raontech vs. Samsung Electronics Co | Raontech vs. Samsung Electronics Co | Raontech vs. LG Energy Solution | Raontech vs. SK Hynix |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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