Correlation Between United Microelectronics and Asmedia Technology
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Asmedia 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 Asmedia 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 Asmedia Technology, you can compare the effects of market volatilities on United Microelectronics and Asmedia 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 Asmedia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Asmedia Technology.
Diversification Opportunities for United Microelectronics and Asmedia Technology
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Asmedia is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Asmedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asmedia 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 Asmedia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asmedia Technology has no effect on the direction of United Microelectronics i.e., United Microelectronics and Asmedia Technology go up and down completely randomly.
Pair Corralation between United Microelectronics and Asmedia Technology
Assuming the 90 days trading horizon United Microelectronics is expected to generate 23.38 times less return on investment than Asmedia Technology. But when comparing it to its historical volatility, United Microelectronics is 2.11 times less risky than Asmedia Technology. It trades about 0.01 of its potential returns per unit of risk. Asmedia Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 75,727 in Asmedia Technology on August 26, 2024 and sell it today you would earn a total of 88,273 from holding Asmedia Technology or generate 116.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
United Microelectronics vs. Asmedia Technology
Performance |
| Timeline |
| United Microelectronics |
| Asmedia Technology |
United Microelectronics and Asmedia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Asmedia Technology
The main advantage of trading using opposite United Microelectronics and Asmedia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Asmedia 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 Asmedia Technology will offset losses from the drop in Asmedia Technology's long position.| United Microelectronics vs. Novatek Microelectronics Corp | United Microelectronics vs. Quanta Computer |
| Asmedia Technology vs. Novatek Microelectronics Corp | Asmedia Technology vs. Quanta Computer | Asmedia 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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