Correlation Between United Microelectronics and Adata Technology
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Adata 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 Adata 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 Adata Technology Co, you can compare the effects of market volatilities on United Microelectronics and Adata 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 Adata Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Adata Technology.
Diversification Opportunities for United Microelectronics and Adata Technology
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Adata is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Adata Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adata 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 Adata Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adata Technology has no effect on the direction of United Microelectronics i.e., United Microelectronics and Adata Technology go up and down completely randomly.
Pair Corralation between United Microelectronics and Adata Technology
Assuming the 90 days trading horizon United Microelectronics is expected to under-perform the Adata Technology. In addition to that, United Microelectronics is 1.03 times more volatile than Adata Technology Co. It trades about -0.35 of its total potential returns per unit of risk. Adata Technology Co is currently generating about 0.07 per unit of volatility. If you would invest 8,570 in Adata Technology Co on September 1, 2024 and sell it today you would earn a total of 150.00 from holding Adata Technology Co or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Adata Technology Co
Performance |
| Timeline |
| United Microelectronics |
| Adata Technology |
United Microelectronics and Adata Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Adata Technology
The main advantage of trading using opposite United Microelectronics and Adata Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Adata 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 Adata Technology will offset losses from the drop in Adata Technology'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 |
| Adata Technology vs. Transcend Information | Adata Technology vs. Phison Electronics | Adata Technology vs. Nanya Technology Corp | Adata Technology vs. Innolux 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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