Correlation Between United Microelectronics and D Link
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and D Link 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 United Microelectronics and D Link into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and D Link Corp, you can compare the effects of market volatilities on United Microelectronics and D Link 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 United Microelectronics with a short position of D Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and D Link.
Diversification Opportunities for United Microelectronics and D Link
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and 2332 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and D Link Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D Link Corp and United Microelectronics 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 United Microelectronics are associated (or correlated) with D Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D Link Corp has no effect on the direction of United Microelectronics i.e., United Microelectronics and D Link go up and down completely randomly.
Pair Corralation between United Microelectronics and D Link
Assuming the 90 days trading horizon United Microelectronics is expected to under-perform the D Link. But the stock apears to be less risky and, when comparing its historical volatility, United Microelectronics is 2.24 times less risky than D Link. The stock trades about -0.29 of its potential returns per unit of risk. The D Link Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,935 in D Link Corp on August 30, 2024 and sell it today you would earn a total of 385.00 from holding D Link Corp or generate 19.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. D Link Corp
Performance |
| Timeline |
| United Microelectronics |
| D Link Corp |
United Microelectronics and D Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and D Link
The main advantage of trading using opposite United Microelectronics and D Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, D Link 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 D Link will offset losses from the drop in D Link's long position.| United Microelectronics vs. AU Optronics | United Microelectronics vs. Macronix International Co | United Microelectronics vs. Winbond Electronics Corp | United Microelectronics vs. Hon Hai Precision |
| D Link vs. Accton Technology Corp | D Link vs. Compal Electronics | D Link vs. Qisda Corp | D Link vs. Macronix International Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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