Correlation Between General Interface and Top Union
Can any of the company-specific risk be diversified away by investing in both General Interface and Top Union 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 General Interface and Top Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Interface Solution and Top Union Electronics, you can compare the effects of market volatilities on General Interface and Top Union 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 General Interface with a short position of Top Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Interface and Top Union.
Diversification Opportunities for General Interface and Top Union
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and Top is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding General Interface Solution and Top Union Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Union Electronics and General Interface 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 General Interface Solution are associated (or correlated) with Top Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Union Electronics has no effect on the direction of General Interface i.e., General Interface and Top Union go up and down completely randomly.
Pair Corralation between General Interface and Top Union
Assuming the 90 days trading horizon General Interface Solution is expected to under-perform the Top Union. But the stock apears to be less risky and, when comparing its historical volatility, General Interface Solution is 1.15 times less risky than Top Union. The stock trades about -0.06 of its potential returns per unit of risk. The Top Union Electronics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,217 in Top Union Electronics on August 29, 2024 and sell it today you would earn a total of 1,168 from holding Top Union Electronics or generate 52.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Interface Solution vs. Top Union Electronics
Performance |
| Timeline |
| General Interface |
| Top Union Electronics |
General Interface and Top Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Interface and Top Union
The main advantage of trading using opposite General Interface and Top Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Interface position performs unexpectedly, Top Union 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 Top Union will offset losses from the drop in Top Union's long position.| General Interface vs. Zhen Ding Technology | General Interface vs. TPK Holding Co | General Interface vs. Catcher Technology Co | General Interface vs. Flexium Interconnect |
| Top Union vs. Para Light Electronics | Top Union vs. ANJI Technology Co | Top Union vs. Aiptek International | Top Union vs. General Interface Solution |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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