Correlation Between United Microelectronics and Sunplus Technology
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Sunplus Technology 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 Sunplus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Sunplus Technology Co, you can compare the effects of market volatilities on United Microelectronics and Sunplus Technology 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 Sunplus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Sunplus Technology.
Diversification Opportunities for United Microelectronics and Sunplus Technology
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Sunplus is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Sunplus Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunplus Technology 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 Sunplus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunplus Technology has no effect on the direction of United Microelectronics i.e., United Microelectronics and Sunplus Technology go up and down completely randomly.
Pair Corralation between United Microelectronics and Sunplus Technology
Assuming the 90 days trading horizon United Microelectronics is expected to generate 5.44 times less return on investment than Sunplus Technology. But when comparing it to its historical volatility, United Microelectronics is 1.4 times less risky than Sunplus Technology. It trades about 0.01 of its potential returns per unit of risk. Sunplus Technology Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,550 in Sunplus Technology Co on August 24, 2024 and sell it today you would earn a total of 320.00 from holding Sunplus Technology Co or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Sunplus Technology Co
Performance |
| Timeline |
| United Microelectronics |
| Sunplus Technology |
United Microelectronics and Sunplus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Sunplus Technology
The main advantage of trading using opposite United Microelectronics and Sunplus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Sunplus Technology 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 Sunplus Technology will offset losses from the drop in Sunplus Technology's long position.| United Microelectronics vs. Novatek Microelectronics Corp | United Microelectronics vs. MediaTek | United Microelectronics vs. Quanta Computer |
| Sunplus Technology vs. Novatek Microelectronics Corp | Sunplus Technology vs. MediaTek | Sunplus Technology vs. Quanta Computer | Sunplus Technology vs. United Microelectronics |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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