Correlation Between Unisem SA and Uzinexport

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

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

Diversification Opportunities for Unisem SA and Uzinexport

0.26

Correlation Coefficient

Unisem SA  Uzinexport

Modest diversification

The 3 months correlation between Unisem and Uzinexport is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Unisem SA and Uzinexport SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uzinexport SA 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 Uzinexport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uzinexport SA has no effect on the direction of Unisem SA i.e., Unisem SA and Uzinexport go up and down completely randomly.

Pair Corralation between Unisem SA and Uzinexport

Assuming the 90 days trading horizon Unisem SA is expected to generate 0.52 times more return on investment than Uzinexport. However, Unisem SA is 1.92 times less risky than Uzinexport. It trades about 0.16 of its potential returns per unit of risk. Uzinexport SA is currently generating about 0.04 per unit of risk. If you would invest  32.00  in Unisem SA on December 25, 2024 and sell it today you would earn a total of  10.00  from holding Unisem SA or generate 31.25% return on investment over 90 days.

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

Unisem SA  vs.  Uzinexport SA

Unisem SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unisem SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Unisem SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Uzinexport SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Uzinexport SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Uzinexport displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unisem SA and Uzinexport

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

The idea behind Unisem SA and Uzinexport SA 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.