Correlation Between Unigroup Guoxin and Arrow Electronics

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Can any of the company-specific risk be diversified away by investing in both Unigroup Guoxin and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics, you can compare the effects of market volatilities on Unigroup Guoxin and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unigroup Guoxin and Arrow Electronics.

Diversification Opportunities for Unigroup Guoxin and Arrow Electronics

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Unigroup and Arrow is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Unigroup Guoxin Microelectroni and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Unigroup Guoxin i.e., Unigroup Guoxin and Arrow Electronics go up and down completely randomly.

Pair Corralation between Unigroup Guoxin and Arrow Electronics

Assuming the 90 days trading horizon Unigroup Guoxin Microelectronics is expected to generate 1.52 times more return on investment than Arrow Electronics. However, Unigroup Guoxin is 1.52 times more volatile than Arrow Electronics. It trades about 0.0 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.09 per unit of risk. If you would invest  7,742  in Unigroup Guoxin Microelectronics on August 15, 2025 and sell it today you would lose (140.00) from holding Unigroup Guoxin Microelectronics or give up 1.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy90.63%
ValuesDaily Returns

Unigroup Guoxin Microelectroni  vs.  Arrow Electronics

 Performance 
       Timeline  
Unigroup Guoxin Micr 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Unigroup Guoxin Microelectronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Unigroup Guoxin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Arrow Electronics 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Arrow Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Unigroup Guoxin and Arrow Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Unigroup Guoxin and Arrow Electronics

The main advantage of trading using opposite Unigroup Guoxin and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unigroup Guoxin position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.
The idea behind Unigroup Guoxin Microelectronics and Arrow Electronics 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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