Correlation Between United Microelectronics and Spirox Corp
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Spirox Corp 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 Spirox Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Spirox Corp, you can compare the effects of market volatilities on United Microelectronics and Spirox Corp 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 Spirox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Spirox Corp.
Diversification Opportunities for United Microelectronics and Spirox Corp
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Spirox is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Spirox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirox 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 Spirox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirox Corp has no effect on the direction of United Microelectronics i.e., United Microelectronics and Spirox Corp go up and down completely randomly.
Pair Corralation between United Microelectronics and Spirox Corp
Assuming the 90 days trading horizon United Microelectronics is expected to generate 0.47 times more return on investment than Spirox Corp. However, United Microelectronics is 2.13 times less risky than Spirox Corp. It trades about -0.22 of its potential returns per unit of risk. Spirox Corp is currently generating about -0.11 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Spirox Corp
Performance |
| Timeline |
| United Microelectronics |
| Spirox Corp |
United Microelectronics and Spirox Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Spirox Corp
The main advantage of trading using opposite United Microelectronics and Spirox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Spirox Corp 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 Spirox Corp will offset losses from the drop in Spirox Corp'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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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