Correlation Between United Microelectronics and Analog Integrations
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Analog Integrations 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 Analog Integrations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Analog Integrations, you can compare the effects of market volatilities on United Microelectronics and Analog Integrations 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 Analog Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Analog Integrations.
Diversification Opportunities for United Microelectronics and Analog Integrations
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Analog is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Analog Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Integrations 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 Analog Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Integrations has no effect on the direction of United Microelectronics i.e., United Microelectronics and Analog Integrations go up and down completely randomly.
Pair Corralation between United Microelectronics and Analog Integrations
Assuming the 90 days trading horizon United Microelectronics is expected to generate 0.63 times more return on investment than Analog Integrations. However, United Microelectronics is 1.58 times less risky than Analog Integrations. It trades about -0.02 of its potential returns per unit of risk. Analog Integrations is currently generating about -0.11 per unit of risk. If you would invest 4,940 in United Microelectronics on September 1, 2024 and sell it today you would lose (585.00) from holding United Microelectronics or give up 11.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
United Microelectronics vs. Analog Integrations
Performance |
| Timeline |
| United Microelectronics |
| Analog Integrations |
United Microelectronics and Analog Integrations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Analog Integrations
The main advantage of trading using opposite United Microelectronics and Analog Integrations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Analog Integrations 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 Analog Integrations will offset losses from the drop in Analog Integrations' 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 |
| Analog Integrations vs. Winstek Semiconductor Co | Analog Integrations vs. Kindom Construction Corp | Analog Integrations vs. WiseChip Semiconductor | Analog Integrations vs. Davicom Semiconductor |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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