Correlation Between International CSRC and Unic Technology

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

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

Diversification Opportunities for International CSRC and Unic Technology

0.63

Correlation Coefficient

International CSRC  Unic Technology

Poor diversification

The 3 months correlation between International and Unic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding International CSRC Investment and Unic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unic Technology and International CSRC 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 International CSRC Investment are associated (or correlated) with Unic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unic Technology has no effect on the direction of International CSRC i.e., International CSRC and Unic Technology go up and down completely randomly.

Pair Corralation between International CSRC and Unic Technology

Assuming the 90 days trading horizon International CSRC Investment is expected to under-perform the Unic Technology. But the stock apears to be less risky and, when comparing its historical volatility, International CSRC Investment is 2.72 times less risky than Unic Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Unic Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,428  in Unic Technology on October 26, 2024 and sell it today you would earn a total of  1,392  from holding Unic Technology or generate 97.48% return on investment over 90 days.

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

International CSRC Investment  vs.  Unic Technology

International CSRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International CSRC Investment 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Unic Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unic 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with International CSRC and Unic Technology

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

The idea behind International CSRC Investment and Unic 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.