Correlation Between Unigroup Guoxin and Industrial

Can any of the company-specific risk be diversified away by investing in both Unigroup Guoxin and Industrial 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 Industrial 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 Industrial and Commercial, you can compare the effects of market volatilities on Unigroup Guoxin and Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unigroup Guoxin and Industrial.

Diversification Opportunities for Unigroup Guoxin and Industrial

-0.13

Correlation Coefficient

Unigroup Guoxin  Industrial

Good diversification

The 3 months correlation between Unigroup and Industrial is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Unigroup Guoxin Microelectroni and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Unigroup Guoxin i.e., Unigroup Guoxin and Industrial go up and down completely randomly.

Pair Corralation between Unigroup Guoxin and Industrial

Assuming the 90 days trading horizon Unigroup Guoxin Microelectronics is expected to under-perform the Industrial. In addition to that, Unigroup Guoxin is 1.64 times more volatile than Industrial and Commercial. It trades about -0.04 of its total potential returns per unit of risk. Industrial and Commercial is currently generating about 0.14 per unit of volatility. If you would invest  621.00  in Industrial and Commercial on December 3, 2024 and sell it today you would earn a total of  64.00  from holding Industrial and Commercial or generate 10.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Unigroup Guoxin Microelectroni  vs.  Industrial and Commercial

Unigroup Guoxin Micr

Risk-Adjusted Performance

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 somewhat strong basic indicators, Unigroup Guoxin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Industrial and Commercial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial and Commercial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Industrial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Unigroup Guoxin and Industrial

The main advantage of trading using opposite Unigroup Guoxin and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unigroup Guoxin position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.

The idea behind Unigroup Guoxin Microelectronics and Industrial and Commercial 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.