Correlation Between SS TECH and UNISEM

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

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

Diversification Opportunities for SS TECH and UNISEM

0.64

Correlation Coefficient

SS TECH  UNISEM

Poor diversification

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

Pair Corralation between SS TECH and UNISEM

Assuming the 90 days trading horizon SS TECH is expected to generate 1.18 times more return on investment than UNISEM. However, SS TECH is 1.18 times more volatile than UNISEM Co. It trades about 0.18 of its potential returns per unit of risk. UNISEM Co is currently generating about 0.11 per unit of risk. 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

SS TECH  vs.  UNISEM Co

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.

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.

Pair Trading with SS TECH and UNISEM

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

The idea behind SS TECH and UNISEM Co 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.