Correlation Between Union Petrochemical and Winner Group

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

By analyzing existing cross correlation between Union Petrochemical Public and Winner Group Enterprise, you can compare the effects of market volatilities on Union Petrochemical and Winner Group 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 Petrochemical with a short position of Winner Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Petrochemical and Winner Group.

Diversification Opportunities for Union Petrochemical and Winner Group

0.71

Correlation Coefficient

Union Petrochemical  Winner Group

Poor diversification

The 3 months correlation between Union and Winner is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Union Petrochemical Public and Winner Group Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Group Enterprise and Union Petrochemical 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 Petrochemical Public are associated (or correlated) with Winner Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Group Enterprise has no effect on the direction of Union Petrochemical i.e., Union Petrochemical and Winner Group go up and down completely randomly.

Pair Corralation between Union Petrochemical and Winner Group

Assuming the 90 days trading horizon Union Petrochemical Public is expected to under-perform the Winner Group. In addition to that, Union Petrochemical is 2.14 times more volatile than Winner Group Enterprise. It trades about -0.27 of its total potential returns per unit of risk. Winner Group Enterprise is currently generating about -0.13 per unit of volatility. If you would invest  214.00  in Winner Group Enterprise on September 27, 2024 and sell it today you would lose (14.00) from holding Winner Group Enterprise or give up 6.54% of portfolio value over 90 days.

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

Union Petrochemical Public  vs.  Winner Group Enterprise

Union Petrochemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Union Petrochemical Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Winner Group Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winner Group Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Union Petrochemical and Winner Group

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

The idea behind Union Petrochemical Public and Winner Group Enterprise 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.