Correlation Between I Jang and Unitech Electronics
Can any of the company-specific risk be diversified away by investing in both I Jang 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 I Jang and Unitech Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Jang Industrial and Unitech Electronics Co, you can compare the effects of market volatilities on I Jang 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 I Jang with a short position of Unitech Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Jang and Unitech Electronics.
Diversification Opportunities for I Jang and Unitech Electronics
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between 8342 and Unitech is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding I Jang Industrial and Unitech Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitech Electronics and I Jang 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 Jang Industrial 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 I Jang i.e., I Jang and Unitech Electronics go up and down completely randomly.
Pair Corralation between I Jang and Unitech Electronics
Assuming the 90 days trading horizon I Jang is expected to generate 1.03 times less return on investment than Unitech Electronics. But when comparing it to its historical volatility, I Jang Industrial is 1.91 times less risky than Unitech Electronics. It trades about 0.05 of its potential returns per unit of risk. Unitech Electronics Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,475 in Unitech Electronics Co on October 13, 2024 and sell it today you would earn a total of 130.00 from holding Unitech Electronics Co or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Jang Industrial vs. Unitech Electronics Co
Performance |
| Timeline |
| I Jang Industrial |
| Unitech Electronics |
I Jang and Unitech Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Jang and Unitech Electronics
The main advantage of trading using opposite I Jang and Unitech Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Jang 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.| I Jang vs. AVerMedia Technologies | I Jang vs. Min Aik Technology | I Jang vs. Uniform Industrial Corp | I Jang vs. Information Technology Total |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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