Correlation Between I Sheng and Unitech Computer
Can any of the company-specific risk be diversified away by investing in both I Sheng 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 I Sheng and Unitech Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Sheng Electric Wire and Unitech Computer Co, you can compare the effects of market volatilities on I Sheng 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 I Sheng with a short position of Unitech Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Sheng and Unitech Computer.
Diversification Opportunities for I Sheng and Unitech Computer
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 6115 and Unitech is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding I Sheng Electric Wire and Unitech Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitech Computer and I Sheng 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 I Sheng Electric Wire 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 I Sheng i.e., I Sheng and Unitech Computer go up and down completely randomly.
Pair Corralation between I Sheng and Unitech Computer
Assuming the 90 days trading horizon I Sheng Electric Wire is expected to under-perform the Unitech Computer. But the stock apears to be less risky and, when comparing its historical volatility, I Sheng Electric Wire is 1.54 times less risky than Unitech Computer. The stock trades about -0.04 of its potential returns per unit of risk. The Unitech Computer Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,755 in Unitech Computer Co on September 3, 2024 and sell it today you would earn a total of 75.00 from holding Unitech Computer Co or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Sheng Electric Wire vs. Unitech Computer Co
Performance |
| Timeline |
| I Sheng Electric |
| Unitech Computer |
I Sheng and Unitech Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Sheng and Unitech Computer
The main advantage of trading using opposite I Sheng and Unitech Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Sheng 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.| I Sheng vs. RiTdisplay Corp | I Sheng vs. WinMate Communication INC | I Sheng vs. Hannstar Display Corp | I Sheng vs. Unitech Computer Co |
| Unitech Computer vs. Taiwan Semiconductor Manufacturing | Unitech Computer vs. Yang Ming Marine | Unitech Computer vs. ASE Industrial Holding | Unitech Computer vs. AU Optronics |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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