Correlation Between Shanghai Commercial and Unitech Electronics
Can any of the company-specific risk be diversified away by investing in both Shanghai Commercial and Unitech 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 Shanghai Commercial and Unitech Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai Commercial Savings and Unitech Electronics Co, you can compare the effects of market volatilities on Shanghai Commercial and Unitech 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 Shanghai Commercial with a short position of Unitech Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Commercial and Unitech Electronics.
Diversification Opportunities for Shanghai Commercial and Unitech Electronics
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shanghai and Unitech is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Commercial Savings and Unitech Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitech Electronics and Shanghai Commercial 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 Shanghai Commercial Savings are associated (or correlated) with Unitech Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unitech Electronics has no effect on the direction of Shanghai Commercial i.e., Shanghai Commercial and Unitech Electronics go up and down completely randomly.
Pair Corralation between Shanghai Commercial and Unitech Electronics
Assuming the 90 days trading horizon Shanghai Commercial Savings is expected to generate 0.5 times more return on investment than Unitech Electronics. However, Shanghai Commercial Savings is 1.99 times less risky than Unitech Electronics. It trades about 0.04 of its potential returns per unit of risk. Unitech Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 4,035 in Shanghai Commercial Savings on October 13, 2024 and sell it today you would earn a total of 40.00 from holding Shanghai Commercial Savings or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shanghai Commercial Savings vs. Unitech Electronics Co
Performance |
| Timeline |
| Shanghai Commercial |
| Unitech Electronics |
Shanghai Commercial and Unitech Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Commercial and Unitech Electronics
The main advantage of trading using opposite Shanghai Commercial and Unitech Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Commercial position performs unexpectedly, Unitech 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 Unitech Electronics will offset losses from the drop in Unitech Electronics' long position.| Shanghai Commercial vs. Mega Financial Holding | Shanghai Commercial vs. Yuanta Financial Holdings | Shanghai Commercial vs. ESUN Financial Holding | Shanghai Commercial vs. Taiwan Cooperative Financial |
| Unitech Electronics vs. Adata Technology Co | Unitech Electronics vs. Data International Co | Unitech Electronics vs. Transcend Information | Unitech Electronics vs. Mercuries Data Systems |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |