Correlation Between United Microelectronics and Siward Crystal
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Siward Crystal 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 Siward Crystal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Siward Crystal Technology, you can compare the effects of market volatilities on United Microelectronics and Siward Crystal 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 Siward Crystal. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Siward Crystal.
Diversification Opportunities for United Microelectronics and Siward Crystal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Siward is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Siward Crystal Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siward Crystal 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 Siward Crystal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siward Crystal Technology has no effect on the direction of United Microelectronics i.e., United Microelectronics and Siward Crystal go up and down completely randomly.
Pair Corralation between United Microelectronics and Siward Crystal
Assuming the 90 days trading horizon United Microelectronics is expected to generate 1.16 times more return on investment than Siward Crystal. However, United Microelectronics is 1.16 times more volatile than Siward Crystal Technology. It trades about -0.22 of its potential returns per unit of risk. Siward Crystal Technology is currently generating about -0.32 per unit of risk. If you would invest 4,600 in United Microelectronics on September 3, 2024 and sell it today you would lose (245.00) from holding United Microelectronics or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Siward Crystal Technology
Performance |
| Timeline |
| United Microelectronics |
| Siward Crystal Technology |
United Microelectronics and Siward Crystal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Siward Crystal
The main advantage of trading using opposite United Microelectronics and Siward Crystal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Siward Crystal 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 Siward Crystal will offset losses from the drop in Siward Crystal's long position.| United Microelectronics vs. Taiwan Semiconductor Manufacturing | United Microelectronics vs. Yang Ming Marine | United Microelectronics vs. ASE Industrial Holding | United Microelectronics vs. AU Optronics |
| Siward Crystal vs. Taiwan Semiconductor Manufacturing | Siward Crystal vs. Yang Ming Marine | Siward Crystal vs. ASE Industrial Holding | Siward Crystal vs. AU Optronics |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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