Correlation Between Chiu Ting and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Chiu Ting and Universal Microelectronics 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 Chiu Ting and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiu Ting Machinery and Universal Microelectronics Co, you can compare the effects of market volatilities on Chiu Ting and Universal Microelectronics 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 Chiu Ting with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiu Ting and Universal Microelectronics.
Diversification Opportunities for Chiu Ting and Universal Microelectronics
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chiu and Universal is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Chiu Ting Machinery and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and Chiu Ting 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 Chiu Ting Machinery are associated (or correlated) with Universal Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Microelectronics has no effect on the direction of Chiu Ting i.e., Chiu Ting and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Chiu Ting and Universal Microelectronics
Assuming the 90 days trading horizon Chiu Ting Machinery is expected to generate 0.88 times more return on investment than Universal Microelectronics. However, Chiu Ting Machinery is 1.13 times less risky than Universal Microelectronics. It trades about -0.01 of its potential returns per unit of risk. Universal Microelectronics Co is currently generating about -0.01 per unit of risk. If you would invest 2,815 in Chiu Ting Machinery on September 4, 2024 and sell it today you would lose (370.00) from holding Chiu Ting Machinery or give up 13.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiu Ting Machinery vs. Universal Microelectronics Co
Performance |
| Timeline |
| Chiu Ting Machinery |
| Universal Microelectronics |
Chiu Ting and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiu Ting and Universal Microelectronics
The main advantage of trading using opposite Chiu Ting and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiu Ting position performs unexpectedly, Universal Microelectronics 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 Universal Microelectronics will offset losses from the drop in Universal Microelectronics' long position.| Chiu Ting vs. Chang Type Industrial | Chiu Ting vs. Anderson Industrial Corp | Chiu Ting vs. Klingon Aerospace | Chiu Ting vs. Basso Industry Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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