Correlation Between Hangzhou Arcvideo and Union Semiconductor

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Can any of the company-specific risk be diversified away by investing in both Hangzhou Arcvideo and Union Semiconductor 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 Hangzhou Arcvideo and Union Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hangzhou Arcvideo Technology and Union Semiconductor Co, you can compare the effects of market volatilities on Hangzhou Arcvideo and Union Semiconductor 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 Hangzhou Arcvideo with a short position of Union Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Arcvideo and Union Semiconductor.

Diversification Opportunities for Hangzhou Arcvideo and Union Semiconductor

HangzhouUnionDiversified AwayHangzhouUnionDiversified Away100%
0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hangzhou and Union is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Arcvideo Technology and Union Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Semiconductor and Hangzhou Arcvideo 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 Hangzhou Arcvideo Technology are associated (or correlated) with Union Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Semiconductor has no effect on the direction of Hangzhou Arcvideo i.e., Hangzhou Arcvideo and Union Semiconductor go up and down completely randomly.

Pair Corralation between Hangzhou Arcvideo and Union Semiconductor

Assuming the 90 days trading horizon Hangzhou Arcvideo Technology is expected to generate 4.56 times more return on investment than Union Semiconductor. However, Hangzhou Arcvideo is 4.56 times more volatile than Union Semiconductor Co. It trades about 0.39 of its potential returns per unit of risk. Union Semiconductor Co is currently generating about 0.23 per unit of risk. If you would invest  2,568  in Hangzhou Arcvideo Technology on November 17, 2024 and sell it today you would earn a total of  1,340  from holding Hangzhou Arcvideo Technology or generate 52.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy94.12%
ValuesDaily Returns

Hangzhou Arcvideo Technology  vs.  Union Semiconductor Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025 -40-30-20-10010
JavaScript chart by amCharts 3.21.15688039 688403
       Timeline  
Hangzhou Arcvideo 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Hangzhou Arcvideo Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hangzhou Arcvideo sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb25303540
Union Semiconductor 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Union Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb88.599.510

Hangzhou Arcvideo and Union Semiconductor Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-17.08-12.79-8.5-4.220.04.429.013.5818.1522.73 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15688039 688403
       Returns  

Pair Trading with Hangzhou Arcvideo and Union Semiconductor

The main advantage of trading using opposite Hangzhou Arcvideo and Union Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Arcvideo position performs unexpectedly, Union Semiconductor 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 Union Semiconductor will offset losses from the drop in Union Semiconductor's long position.
The idea behind Hangzhou Arcvideo Technology and Union Semiconductor Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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