Correlation Between Asia Electronic and Unitech Computer
Can any of the company-specific risk be diversified away by investing in both Asia Electronic and Unitech Computer 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 Asia Electronic and Unitech Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Electronic Material and Unitech Computer Co, you can compare the effects of market volatilities on Asia Electronic and Unitech Computer 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 Asia Electronic with a short position of Unitech Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Electronic and Unitech Computer.
Diversification Opportunities for Asia Electronic and Unitech Computer
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Unitech is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Asia Electronic Material and Unitech Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitech Computer and Asia Electronic 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 Asia Electronic Material are associated (or correlated) with Unitech Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unitech Computer has no effect on the direction of Asia Electronic i.e., Asia Electronic and Unitech Computer go up and down completely randomly.
Pair Corralation between Asia Electronic and Unitech Computer
Assuming the 90 days trading horizon Asia Electronic is expected to generate 16.43 times less return on investment than Unitech Computer. In addition to that, Asia Electronic is 1.74 times more volatile than Unitech Computer Co. It trades about 0.02 of its total potential returns per unit of risk. Unitech Computer Co is currently generating about 0.55 per unit of volatility. If you would invest 3,585 in Unitech Computer Co on December 4, 2024 and sell it today you would earn a total of 190.00 from holding Unitech Computer Co or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Electronic Material vs. Unitech Computer Co
Performance |
| Timeline |
| Asia Electronic Material |
| Unitech Computer |
Asia Electronic and Unitech Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Electronic and Unitech Computer
The main advantage of trading using opposite Asia Electronic and Unitech Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Electronic position performs unexpectedly, Unitech Computer 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 Unitech Computer will offset losses from the drop in Unitech Computer's long position.| Asia Electronic vs. Singtex Industrial Co | Asia Electronic vs. Mobiletron Electronics Co | Asia Electronic vs. Tainet Communication System | Asia Electronic vs. Chialin Precision Industrial |
| Unitech Computer vs. Formosan Union Chemical | Unitech Computer vs. Ho Tung Chemical | Unitech Computer vs. CHC Healthcare Group | Unitech Computer vs. MediaTek |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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