Correlation Between Unigroup Guoxin and Jiangxi Selon

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

Diversification Opportunities for Unigroup Guoxin and Jiangxi Selon

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Unigroup and Jiangxi is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Unigroup Guoxin Microelectroni and Jiangxi Selon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Selon Industrial and Unigroup Guoxin 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 Unigroup Guoxin Microelectronics are associated (or correlated) with Jiangxi Selon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Selon Industrial has no effect on the direction of Unigroup Guoxin i.e., Unigroup Guoxin and Jiangxi Selon go up and down completely randomly.

Pair Corralation between Unigroup Guoxin and Jiangxi Selon

Assuming the 90 days trading horizon Unigroup Guoxin Microelectronics is expected to under-perform the Jiangxi Selon. In addition to that, Unigroup Guoxin is 1.18 times more volatile than Jiangxi Selon Industrial. It trades about -0.05 of its total potential returns per unit of risk. Jiangxi Selon Industrial is currently generating about 0.29 per unit of volatility. If you would invest  560.00  in Jiangxi Selon Industrial on October 17, 2024 and sell it today you would earn a total of  277.00  from holding Jiangxi Selon Industrial or generate 49.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.44%
ValuesDaily Returns

Unigroup Guoxin Microelectroni  vs.  Jiangxi Selon Industrial

 Performance 
       Timeline  
Unigroup Guoxin Micr 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Unigroup Guoxin Microelectronics 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.
Jiangxi Selon Industrial 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Jiangxi Selon Industrial are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangxi Selon sustained solid returns over the last few months and may actually be approaching a breakup point.

Unigroup Guoxin and Jiangxi Selon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Unigroup Guoxin and Jiangxi Selon

The main advantage of trading using opposite Unigroup Guoxin and Jiangxi Selon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unigroup Guoxin position performs unexpectedly, Jiangxi Selon 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 Jiangxi Selon will offset losses from the drop in Jiangxi Selon's long position.
The idea behind Unigroup Guoxin Microelectronics and Jiangxi Selon Industrial 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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