Correlation Between UNISEM and KODEX Metaverse

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

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

Diversification Opportunities for UNISEM and KODEX Metaverse

-0.44

Correlation Coefficient

UNISEM  KODEX Metaverse

Very good diversification

The 3 months correlation between UNISEM and KODEX is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and KODEX Metaverse Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KODEX Metaverse Nasdaq 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 KODEX Metaverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KODEX Metaverse Nasdaq has no effect on the direction of UNISEM i.e., UNISEM and KODEX Metaverse go up and down completely randomly.

Pair Corralation between UNISEM and KODEX Metaverse

Assuming the 90 days trading horizon UNISEM is expected to generate 3.9 times less return on investment than KODEX Metaverse. In addition to that, UNISEM is 1.59 times more volatile than KODEX Metaverse Nasdaq. It trades about 0.03 of its total potential returns per unit of risk. KODEX Metaverse Nasdaq is currently generating about 0.18 per unit of volatility. If you would invest  1,287,000  in KODEX Metaverse Nasdaq on October 25, 2024 and sell it today you would earn a total of  262,500  from holding KODEX Metaverse Nasdaq or generate 20.4% return on investment over 90 days.

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

UNISEM Co  vs.  KODEX Metaverse Nasdaq

UNISEM

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UNISEM Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, UNISEM is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

KODEX Metaverse Nasdaq

Risk-Adjusted Performance

14 of 100

Good

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

Pair Trading with UNISEM and KODEX Metaverse

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

The idea behind UNISEM Co and KODEX Metaverse Nasdaq 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.