Correlation Between Xinhua Winshare and Unic Technology

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

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

Diversification Opportunities for Xinhua Winshare and Unic Technology

-0.55

Correlation Coefficient

Xinhua Winshare  Unic Technology

Excellent diversification

The 3 months correlation between Xinhua and Unic is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Unic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unic Technology and Xinhua Winshare 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 Xinhua Winshare Publishing 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 Xinhua Winshare i.e., Xinhua Winshare and Unic Technology go up and down completely randomly.

Pair Corralation between Xinhua Winshare and Unic Technology

Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 1.04 times more return on investment than Unic Technology. However, Xinhua Winshare is 1.04 times more volatile than Unic Technology. It trades about 0.18 of its potential returns per unit of risk. Unic Technology is currently generating about -0.03 per unit of risk. If you would invest  102.00  in Xinhua Winshare Publishing on October 8, 2024 and sell it today you would earn a total of  38.00  from holding Xinhua Winshare Publishing or generate 37.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Xinhua Winshare Publishing  vs.  Unic Technology

Xinhua Winshare Publ

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xinhua Winshare Publishing are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Xinhua Winshare reported solid returns over the last few months and may actually be approaching a breakup point.

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 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 Xinhua Winshare and Unic Technology

The main advantage of trading using opposite Xinhua Winshare and Unic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare 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 Xinhua Winshare Publishing 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.