Correlation Between Unigroup Guoxin and Climb Global

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

By analyzing existing cross correlation between Unigroup Guoxin Microelectronics and Climb Global Solutions, you can compare the effects of market volatilities on Unigroup Guoxin and Climb Global 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 Unigroup Guoxin with a short position of Climb Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unigroup Guoxin and Climb Global.

Diversification Opportunities for Unigroup Guoxin and Climb Global

0.83

Correlation Coefficient

Unigroup Guoxin  Climb Global

Very poor diversification

The 3 months correlation between Unigroup and Climb is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Unigroup Guoxin Microelectroni and Climb Global Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Climb Global Solutions and Unigroup Guoxin 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 Unigroup Guoxin Microelectronics are associated (or correlated) with Climb Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Climb Global Solutions has no effect on the direction of Unigroup Guoxin i.e., Unigroup Guoxin and Climb Global go up and down completely randomly.

Pair Corralation between Unigroup Guoxin and Climb Global

Assuming the 90 days trading horizon Unigroup Guoxin Microelectronics is expected to generate 1.34 times more return on investment than Climb Global. However, Unigroup Guoxin is 1.34 times more volatile than Climb Global Solutions. It trades about 0.18 of its potential returns per unit of risk. Climb Global Solutions is currently generating about 0.21 per unit of risk. If you would invest  4,626  in Unigroup Guoxin Microelectronics on August 21, 2024 and sell it today you would earn a total of  1,927  from holding Unigroup Guoxin Microelectronics or generate 41.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	90.63%
Values	Daily Returns

Unigroup Guoxin Microelectroni  vs.  Climb Global Solutions

Unigroup Guoxin Micr

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unigroup Guoxin Microelectronics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Unigroup Guoxin sustained solid returns over the last few months and may actually be approaching a breakup point.

Climb Global Solutions

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Climb Global Solutions are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Climb Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unigroup Guoxin and Climb Global

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

The idea behind Unigroup Guoxin Microelectronics and Climb Global Solutions 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.