Correlation Between Unisem SA and TRANSILVANIA LEASING

Can any of the company-specific risk be diversified away by investing in both Unisem SA and TRANSILVANIA LEASING 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 Unisem SA and TRANSILVANIA LEASING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Unisem SA and TRANSILVANIA LEASING SI, you can compare the effects of market volatilities on Unisem SA and TRANSILVANIA LEASING 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 Unisem SA with a short position of TRANSILVANIA LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unisem SA and TRANSILVANIA LEASING.

Diversification Opportunities for Unisem SA and TRANSILVANIA LEASING

0.23

Correlation Coefficient

Unisem SA  TRANSILVANIA LEASING

Modest diversification

The 3 months correlation between Unisem and TRANSILVANIA is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Unisem SA and TRANSILVANIA LEASING SI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSILVANIA LEASING and Unisem SA 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 Unisem SA are associated (or correlated) with TRANSILVANIA LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSILVANIA LEASING has no effect on the direction of Unisem SA i.e., Unisem SA and TRANSILVANIA LEASING go up and down completely randomly.

Pair Corralation between Unisem SA and TRANSILVANIA LEASING

Assuming the 90 days trading horizon Unisem SA is expected to generate 1.39 times more return on investment than TRANSILVANIA LEASING. However, Unisem SA is 1.39 times more volatile than TRANSILVANIA LEASING SI. It trades about 0.34 of its potential returns per unit of risk. TRANSILVANIA LEASING SI is currently generating about -0.11 per unit of risk. If you would invest  32.00  in Unisem SA on October 24, 2024 and sell it today you would earn a total of  5.00  from holding Unisem SA or generate 15.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.86%
Values	Daily Returns

Unisem SA  vs.  TRANSILVANIA LEASING SI

Unisem SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unisem SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Unisem SA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

TRANSILVANIA LEASING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRANSILVANIA LEASING SI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Unisem SA and TRANSILVANIA LEASING

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

The idea behind Unisem SA and TRANSILVANIA LEASING SI 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.