Correlation Between Union Semiconductor and AUPU Home

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

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

Diversification Opportunities for Union Semiconductor and AUPU Home

0.42

Correlation Coefficient

Union Semiconductor  AUPU Home

Very weak diversification

The 3 months correlation between Union and AUPU is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Union Semiconductor Co and AUPU Home Style in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUPU Home Style and Union Semiconductor 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 Union Semiconductor Co are associated (or correlated) with AUPU Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUPU Home Style has no effect on the direction of Union Semiconductor i.e., Union Semiconductor and AUPU Home go up and down completely randomly.

Pair Corralation between Union Semiconductor and AUPU Home

Assuming the 90 days trading horizon Union Semiconductor is expected to generate 1.45 times less return on investment than AUPU Home. In addition to that, Union Semiconductor is 1.38 times more volatile than AUPU Home Style. It trades about 0.01 of its total potential returns per unit of risk. AUPU Home Style is currently generating about 0.01 per unit of volatility. If you would invest  1,060  in AUPU Home Style on October 9, 2024 and sell it today you would earn a total of  11.00  from holding AUPU Home Style or generate 1.04% return on investment over 90 days.

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

Union Semiconductor Co  vs.  AUPU Home Style

Union Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Union Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AUPU Home Style

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AUPU Home Style are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AUPU Home is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Union Semiconductor and AUPU Home

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

The idea behind Union Semiconductor Co and AUPU Home Style 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.