Correlation Between UNISEM and Handok Clean

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

By analyzing existing cross correlation between UNISEM Co and Handok Clean Tech, you can compare the effects of market volatilities on UNISEM and Handok Clean 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 with a short position of Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNISEM and Handok Clean.

Diversification Opportunities for UNISEM and Handok Clean

0.66

Correlation Coefficient

UNISEM  Handok Clean

Poor diversification

The 3 months correlation between UNISEM and Handok is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding UNISEM Co and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech and UNISEM 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 Co are associated (or correlated) with Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of UNISEM i.e., UNISEM and Handok Clean go up and down completely randomly.

Pair Corralation between UNISEM and Handok Clean

Assuming the 90 days trading horizon UNISEM Co is expected to under-perform the Handok Clean. In addition to that, UNISEM is 2.96 times more volatile than Handok Clean Tech. It trades about -0.08 of its total potential returns per unit of risk. Handok Clean Tech is currently generating about -0.14 per unit of volatility. If you would invest  700,000  in Handok Clean Tech on September 3, 2024 and sell it today you would lose (65,000) from holding Handok Clean Tech or give up 9.29% of portfolio value over 90 days.

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

UNISEM Co  vs.  Handok Clean Tech

UNISEM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNISEM Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Handok Clean Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Handok Clean Tech 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 UNISEM and Handok Clean

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

The idea behind UNISEM Co and Handok Clean Tech 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..