Correlation Between Unitech Electronics and C Media

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

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

Diversification Opportunities for Unitech Electronics and C Media

0.41

Correlation Coefficient

Unitech Electronics  C Media

Very weak diversification

The 3 months correlation between Unitech and 6237 is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Unitech Electronics Co and C Media Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Media Electronics and Unitech Electronics 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 Unitech Electronics Co are associated (or correlated) with C Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Media Electronics has no effect on the direction of Unitech Electronics i.e., Unitech Electronics and C Media go up and down completely randomly.

Pair Corralation between Unitech Electronics and C Media

Assuming the 90 days trading horizon Unitech Electronics is expected to generate 1.15 times less return on investment than C Media. In addition to that, Unitech Electronics is 1.09 times more volatile than C Media Electronics. It trades about 0.05 of its total potential returns per unit of risk. C Media Electronics is currently generating about 0.06 per unit of volatility. If you would invest  4,965  in C Media Electronics on September 26, 2024 and sell it today you would earn a total of  125.00  from holding C Media Electronics or generate 2.52% return on investment over 90 days.

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

Unitech Electronics Co  vs.  C Media Electronics

Unitech Electronics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unitech Electronics Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Unitech Electronics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

C Media Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days C Media Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Unitech Electronics and C Media

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

The idea behind Unitech Electronics Co and C Media Electronics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.