Correlation Between Unimit Engineering and Chewathai Public
Can any of the company-specific risk be diversified away by investing in both Unimit Engineering and Chewathai Public 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 Unimit Engineering and Chewathai Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unimit Engineering Public and Chewathai Public, you can compare the effects of market volatilities on Unimit Engineering and Chewathai Public 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 Unimit Engineering with a short position of Chewathai Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unimit Engineering and Chewathai Public.
Diversification Opportunities for Unimit Engineering and Chewathai Public
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Unimit and Chewathai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Unimit Engineering Public and Chewathai Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chewathai Public and Unimit Engineering 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 Unimit Engineering Public are associated (or correlated) with Chewathai Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chewathai Public has no effect on the direction of Unimit Engineering i.e., Unimit Engineering and Chewathai Public go up and down completely randomly.
Pair Corralation between Unimit Engineering and Chewathai Public
Assuming the 90 days trading horizon Unimit Engineering Public is expected to generate 1.0 times more return on investment than Chewathai Public. However, Unimit Engineering is 1.0 times more volatile than Chewathai Public. It trades about 0.04 of its potential returns per unit of risk. Chewathai Public is currently generating about 0.04 per unit of risk. If you would invest 130.00 in Unimit Engineering Public on September 25, 2024 and sell it today you would lose (10.00) from holding Unimit Engineering Public or give up 7.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.79% |
Values | Daily Returns |
Unimit Engineering Public vs. Chewathai Public
Performance |
Timeline |
Unimit Engineering Public |
Chewathai Public |
Unimit Engineering and Chewathai Public Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Unimit Engineering and Chewathai Public
The main advantage of trading using opposite Unimit Engineering and Chewathai Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimit Engineering position performs unexpectedly, Chewathai Public 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 Chewathai Public will offset losses from the drop in Chewathai Public's long position.Unimit Engineering vs. Union Petrochemical Public | Unimit Engineering vs. Ubis Public | Unimit Engineering vs. Unique Mining Services | Unimit Engineering vs. Eureka Design Public |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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