Correlation Between United Microelectronics and Flexium Interconnect
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Flexium Interconnect 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 Flexium Interconnect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Flexium Interconnect, you can compare the effects of market volatilities on United Microelectronics and Flexium Interconnect 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 Flexium Interconnect. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Flexium Interconnect.
Diversification Opportunities for United Microelectronics and Flexium Interconnect
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Flexium is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Flexium Interconnect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexium Interconnect 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 Flexium Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexium Interconnect has no effect on the direction of United Microelectronics i.e., United Microelectronics and Flexium Interconnect go up and down completely randomly.
Pair Corralation between United Microelectronics and Flexium Interconnect
Assuming the 90 days trading horizon United Microelectronics is expected to generate 0.52 times more return on investment than Flexium Interconnect. However, United Microelectronics is 1.91 times less risky than Flexium Interconnect. It trades about -0.22 of its potential returns per unit of risk. Flexium Interconnect is currently generating about -0.24 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Flexium Interconnect
Performance |
| Timeline |
| United Microelectronics |
| Flexium Interconnect |
United Microelectronics and Flexium Interconnect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Flexium Interconnect
The main advantage of trading using opposite United Microelectronics and Flexium Interconnect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Flexium Interconnect 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 Flexium Interconnect will offset losses from the drop in Flexium Interconnect'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 |
| Flexium Interconnect vs. Zhen Ding Technology | Flexium Interconnect vs. Catcher Technology Co | Flexium Interconnect vs. Unimicron Technology Corp | Flexium Interconnect vs. Career Technology MFG |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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