Correlation Between Unity Software and China Resources
Can any of the company-specific risk be diversified away by investing in both Unity Software and China Resources 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 Unity Software and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unity Software and China Resources Power, you can compare the effects of market volatilities on Unity Software and China Resources 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 Unity Software with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unity Software and China Resources.
Diversification Opportunities for Unity Software and China Resources
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Unity and China is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and China Resources Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Power and Unity Software 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 Unity Software are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Power has no effect on the direction of Unity Software i.e., Unity Software and China Resources go up and down completely randomly.
Pair Corralation between Unity Software and China Resources
Assuming the 90 days horizon Unity Software is expected to generate 2.97 times more return on investment than China Resources. However, Unity Software is 2.97 times more volatile than China Resources Power. It trades about 0.0 of its potential returns per unit of risk. China Resources Power is currently generating about -0.41 per unit of risk. If you would invest 2,157 in Unity Software on October 29, 2024 and sell it today you would lose (33.00) from holding Unity Software or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unity Software vs. China Resources Power
Performance |
| Timeline |
| Unity Software |
| China Resources Power |
Unity Software and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unity Software and China Resources
The main advantage of trading using opposite Unity Software and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unity Software position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Unity Software vs. CARSALESCOM | Unity Software vs. Indutrade AB | Unity Software vs. GEELY AUTOMOBILE | Unity Software vs. INTER CARS SA |
| China Resources vs. Minerals Technologies | China Resources vs. Allegheny Technologies Incorporated | China Resources vs. Easy Software AG | China Resources vs. BioNTech SE |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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