Correlation Between Bin Chuan and Univacco Technology

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

By analyzing existing cross correlation between Bin Chuan Enterprise and Univacco Technology, you can compare the effects of market volatilities on Bin Chuan and Univacco Technology 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 Bin Chuan with a short position of Univacco Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bin Chuan and Univacco Technology.

Diversification Opportunities for Bin Chuan and Univacco Technology

-0.54

Correlation Coefficient

Bin Chuan  Univacco Technology

Excellent diversification

The 3 months correlation between Bin and Univacco is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bin Chuan Enterprise and Univacco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univacco Technology and Bin Chuan 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 Bin Chuan Enterprise are associated (or correlated) with Univacco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univacco Technology has no effect on the direction of Bin Chuan i.e., Bin Chuan and Univacco Technology go up and down completely randomly.

Pair Corralation between Bin Chuan and Univacco Technology

Assuming the 90 days trading horizon Bin Chuan Enterprise is expected to generate 0.95 times more return on investment than Univacco Technology. However, Bin Chuan Enterprise is 1.05 times less risky than Univacco Technology. It trades about 0.11 of its potential returns per unit of risk. Univacco Technology is currently generating about 0.08 per unit of risk. If you would invest  2,020  in Bin Chuan Enterprise on September 20, 2024 and sell it today you would earn a total of  3,700  from holding Bin Chuan Enterprise or generate 183.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

Bin Chuan Enterprise  vs.  Univacco Technology

Bin Chuan Enterprise

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bin Chuan Enterprise are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Bin Chuan showed solid returns over the last few months and may actually be approaching a breakup point.

Univacco Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Univacco Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Bin Chuan and Univacco Technology

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

The idea behind Bin Chuan Enterprise and Univacco Technology 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.