Correlation Between UNISEM and Kia Corp
Can any of the company-specific risk be diversified away by investing in both UNISEM and Kia Corp 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 UNISEM and Kia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNISEM Co and Kia Corp, you can compare the effects of market volatilities on UNISEM and Kia Corp 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 UNISEM with a short position of Kia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and Kia Corp.
Diversification Opportunities for UNISEM and Kia Corp
Very weak diversification
The 3 months correlation between UNISEM and Kia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and Kia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kia Corp and UNISEM 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 UNISEM Co are associated (or correlated) with Kia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kia Corp has no effect on the direction of UNISEM i.e., UNISEM and Kia Corp go up and down completely randomly.
Pair Corralation between UNISEM and Kia Corp
Assuming the 90 days trading horizon UNISEM Co is expected to under-perform the Kia Corp. In addition to that, UNISEM is 1.55 times more volatile than Kia Corp. It trades about -0.06 of its total potential returns per unit of risk. Kia Corp is currently generating about -0.04 per unit of volatility. If you would invest 10,080,000 in Kia Corp on September 7, 2024 and sell it today you would lose (600,000) from holding Kia Corp or give up 5.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
UNISEM Co vs. Kia Corp
Performance |
Timeline |
UNISEM |
Kia Corp |
UNISEM and Kia Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UNISEM and Kia Corp
The main advantage of trading using opposite UNISEM and Kia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNISEM position performs unexpectedly, Kia Corp 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 Kia Corp will offset losses from the drop in Kia Corp's long position.UNISEM vs. Keyang Electric Machinery | UNISEM vs. Samlip General Foods | UNISEM vs. CKH Food Health | UNISEM vs. FoodNamoo |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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