Correlation Between GDS Holdings and Unisys
Can any of the company-specific risk be diversified away by investing in both GDS Holdings and Unisys 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 GDS Holdings and Unisys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GDS Holdings and Unisys, you can compare the effects of market volatilities on GDS Holdings and Unisys 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 GDS Holdings with a short position of Unisys. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDS Holdings and Unisys.
Diversification Opportunities for GDS Holdings and Unisys
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GDS and Unisys is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GDS Holdings and Unisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unisys and GDS Holdings 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 GDS Holdings are associated (or correlated) with Unisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unisys has no effect on the direction of GDS Holdings i.e., GDS Holdings and Unisys go up and down completely randomly.
Pair Corralation between GDS Holdings and Unisys
Considering the 90-day investment horizon GDS Holdings is expected to under-perform the Unisys. But the stock apears to be less risky and, when comparing its historical volatility, GDS Holdings is 1.37 times less risky than Unisys. The stock trades about -0.1 of its potential returns per unit of risk. The Unisys is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 567.00 in Unisys on August 24, 2024 and sell it today you would earn a total of 213.00 from holding Unisys or generate 37.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GDS Holdings vs. Unisys
Performance |
| Timeline |
| GDS Holdings |
| Unisys |
GDS Holdings and Unisys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GDS Holdings and Unisys
The main advantage of trading using opposite GDS Holdings and Unisys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GDS Holdings position performs unexpectedly, Unisys 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 Unisys will offset losses from the drop in Unisys' long position.| GDS Holdings vs. ExlService Holdings | GDS Holdings vs. Gartner | GDS Holdings vs. VNET Group DRC | GDS Holdings vs. CLARIVATE PLC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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