Correlation Between UNISEM and SS TECH

Can any of the company-specific risk be diversified away by investing in both UNISEM and SS TECH 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 SS TECH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNISEM Co and SS TECH, you can compare the effects of market volatilities on UNISEM and SS TECH 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 SS TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and SS TECH.

Diversification Opportunities for UNISEM and SS TECH

0.64

Correlation Coefficient

UNISEM  SS TECH

Poor diversification

The 3 months correlation between UNISEM and 101490 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH 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 SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of UNISEM i.e., UNISEM and SS TECH go up and down completely randomly.

Pair Corralation between UNISEM and SS TECH

Assuming the 90 days trading horizon UNISEM is expected to generate 2.02 times less return on investment than SS TECH. But when comparing it to its historical volatility, UNISEM Co is 1.18 times less risky than SS TECH. It trades about 0.11 of its potential returns per unit of risk. SS TECH is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,505,000  in SS TECH on December 26, 2024 and sell it today you would earn a total of  910,000  from holding SS TECH or generate 36.33% return on investment over 90 days.

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

UNISEM Co  vs.  SS TECH

UNISEM

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UNISEM Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, UNISEM sustained solid returns over the last few months and may actually be approaching a breakup point.

SS TECH

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SS TECH are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SS TECH sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNISEM and SS TECH

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

The idea behind UNISEM Co and SS TECH 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.