Correlation Between United Microelectronics and Sitronix Technology
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Sitronix 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 Sitronix 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 Sitronix Technology Corp, you can compare the effects of market volatilities on United Microelectronics and Sitronix 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 Sitronix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Sitronix Technology.
Diversification Opportunities for United Microelectronics and Sitronix Technology
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Sitronix is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Sitronix Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitronix Technology Corp 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 Sitronix Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitronix Technology Corp has no effect on the direction of United Microelectronics i.e., United Microelectronics and Sitronix Technology go up and down completely randomly.
Pair Corralation between United Microelectronics and Sitronix Technology
Assuming the 90 days trading horizon United Microelectronics is expected to generate 0.97 times more return on investment than Sitronix Technology. However, United Microelectronics is 1.03 times less risky than Sitronix Technology. It trades about -0.05 of its potential returns per unit of risk. Sitronix Technology Corp is currently generating about -0.11 per unit of risk. If you would invest 5,210 in United Microelectronics on September 3, 2024 and sell it today you would lose (855.00) from holding United Microelectronics or give up 16.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Sitronix Technology Corp
Performance |
| Timeline |
| United Microelectronics |
| Sitronix Technology Corp |
United Microelectronics and Sitronix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Sitronix Technology
The main advantage of trading using opposite United Microelectronics and Sitronix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Sitronix 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 Sitronix Technology will offset losses from the drop in Sitronix Technology'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 |
| Sitronix Technology vs. Taiwan Semiconductor Manufacturing | Sitronix Technology vs. Yang Ming Marine | Sitronix Technology vs. ASE Industrial Holding | Sitronix Technology vs. AU Optronics |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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