Correlation Between United Microelectronics and Excelliance MOS
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Excelliance MOS 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 Excelliance MOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Excelliance MOS, you can compare the effects of market volatilities on United Microelectronics and Excelliance MOS 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 Excelliance MOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Excelliance MOS.
Diversification Opportunities for United Microelectronics and Excelliance MOS
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Excelliance is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Excelliance MOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelliance MOS 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 Excelliance MOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelliance MOS has no effect on the direction of United Microelectronics i.e., United Microelectronics and Excelliance MOS go up and down completely randomly.
Pair Corralation between United Microelectronics and Excelliance MOS
Assuming the 90 days trading horizon United Microelectronics is expected to under-perform the Excelliance MOS. In addition to that, United Microelectronics is 1.1 times more volatile than Excelliance MOS. It trades about -0.3 of its total potential returns per unit of risk. Excelliance MOS is currently generating about -0.21 per unit of volatility. If you would invest 9,430 in Excelliance MOS on August 30, 2024 and sell it today you would lose (520.00) from holding Excelliance MOS or give up 5.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Excelliance MOS
Performance |
| Timeline |
| United Microelectronics |
| Excelliance MOS |
United Microelectronics and Excelliance MOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Excelliance MOS
The main advantage of trading using opposite United Microelectronics and Excelliance MOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Excelliance MOS 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 Excelliance MOS will offset losses from the drop in Excelliance MOS's long position.| United Microelectronics vs. Sitronix Technology Corp | United Microelectronics vs. Elan Microelectronics Corp |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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