Correlation Between Chinese Gamer and Unitech Computer

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

By analyzing existing cross correlation between Chinese Gamer International and Unitech Computer Co, you can compare the effects of market volatilities on Chinese Gamer and Unitech Computer 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 Chinese Gamer with a short position of Unitech Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chinese Gamer and Unitech Computer.

Diversification Opportunities for Chinese Gamer and Unitech Computer

0.0

Correlation Coefficient

Chinese Gamer  Unitech Computer

Pay attention - limited upside

The 3 months correlation between Chinese and Unitech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chinese Gamer International and Unitech Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitech Computer and Chinese Gamer 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 Chinese Gamer International are associated (or correlated) with Unitech Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unitech Computer has no effect on the direction of Chinese Gamer i.e., Chinese Gamer and Unitech Computer go up and down completely randomly.

Pair Corralation between Chinese Gamer and Unitech Computer

Assuming the 90 days trading horizon Chinese Gamer International is expected to under-perform the Unitech Computer. In addition to that, Chinese Gamer is 1.03 times more volatile than Unitech Computer Co. It trades about -0.03 of its total potential returns per unit of risk. Unitech Computer Co is currently generating about 0.1 per unit of volatility. If you would invest  3,490  in Unitech Computer Co on September 14, 2024 and sell it today you would earn a total of  245.00  from holding Unitech Computer Co or generate 7.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Chinese Gamer International  vs.  Unitech Computer Co

Chinese Gamer Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chinese Gamer International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Chinese Gamer is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Unitech Computer

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unitech Computer Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Unitech Computer may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Chinese Gamer and Unitech Computer

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

The idea behind Chinese Gamer International and Unitech Computer Co 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.