Correlation Between Global Brands and Unitech Printed
Can any of the company-specific risk be diversified away by investing in both Global Brands and Unitech Printed 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 Brands and Unitech Printed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Brands Manufacture and Unitech Printed Circuit, you can compare the effects of market volatilities on Global Brands and Unitech Printed 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 Brands with a short position of Unitech Printed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Brands and Unitech Printed.
Diversification Opportunities for Global Brands and Unitech Printed
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Unitech is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Global Brands Manufacture and Unitech Printed Circuit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitech Printed Circuit and Global Brands 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 Brands Manufacture are associated (or correlated) with Unitech Printed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unitech Printed Circuit has no effect on the direction of Global Brands i.e., Global Brands and Unitech Printed go up and down completely randomly.
Pair Corralation between Global Brands and Unitech Printed
Assuming the 90 days trading horizon Global Brands Manufacture is expected to under-perform the Unitech Printed. But the stock apears to be less risky and, when comparing its historical volatility, Global Brands Manufacture is 1.57 times less risky than Unitech Printed. The stock trades about -0.22 of its potential returns per unit of risk. The Unitech Printed Circuit is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,095 in Unitech Printed Circuit on September 2, 2024 and sell it today you would earn a total of 35.00 from holding Unitech Printed Circuit or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Brands Manufacture vs. Unitech Printed Circuit
Performance |
| Timeline |
| Global Brands Manufacture |
| Unitech Printed Circuit |
Global Brands and Unitech Printed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Brands and Unitech Printed
The main advantage of trading using opposite Global Brands and Unitech Printed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Brands position performs unexpectedly, Unitech Printed 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 Printed will offset losses from the drop in Unitech Printed's long position.| Global Brands vs. HannStar Board Corp | Global Brands vs. ITEQ Corp | Global Brands vs. Unitech Printed Circuit | Global Brands vs. Career Technology MFG |
| Unitech Printed vs. Compeq Manufacturing Co | Unitech Printed vs. Gold Circuit Electronics | Unitech Printed vs. WUS Printed Circuit | Unitech Printed vs. Chin Poon Industrial Co |
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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