Correlation Between UNISEM and KIM KINDEX

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

By analyzing existing cross correlation between UNISEM Co and KIM KINDEX 200, you can compare the effects of market volatilities on UNISEM and KIM KINDEX 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 KIM KINDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and KIM KINDEX.

Diversification Opportunities for UNISEM and KIM KINDEX

0.91

Correlation Coefficient

UNISEM  KIM KINDEX

Almost no diversification

The 3 months correlation between UNISEM and KIM is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and KIM KINDEX 200 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIM KINDEX 200 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 KIM KINDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIM KINDEX 200 has no effect on the direction of UNISEM i.e., UNISEM and KIM KINDEX go up and down completely randomly.

Pair Corralation between UNISEM and KIM KINDEX

Assuming the 90 days trading horizon UNISEM Co is expected to generate 2.63 times more return on investment than KIM KINDEX. However, UNISEM is 2.63 times more volatile than KIM KINDEX 200. It trades about 0.13 of its potential returns per unit of risk. KIM KINDEX 200 is currently generating about 0.18 per unit of risk. If you would invest  586,849  in UNISEM Co on December 23, 2024 and sell it today you would earn a total of  119,151  from holding UNISEM Co or generate 20.3% return on investment over 90 days.

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

UNISEM Co  vs.  KIM KINDEX 200

UNISEM

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UNISEM Co are ranked lower than 10 (%) 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.

KIM KINDEX 200

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KIM KINDEX 200 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KIM KINDEX may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with UNISEM and KIM KINDEX

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

The idea behind UNISEM Co and KIM KINDEX 200 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.