Correlation Between Microelectronics and Integrated Service
Can any of the company-specific risk be diversified away by investing in both Microelectronics and Integrated Service 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 Microelectronics and Integrated Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microelectronics Technology and Integrated Service Technology, you can compare the effects of market volatilities on Microelectronics and Integrated Service 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 Microelectronics with a short position of Integrated Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microelectronics and Integrated Service.
Diversification Opportunities for Microelectronics and Integrated Service
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microelectronics and Integrated is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microelectronics Technology and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service and 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 Microelectronics Technology are associated (or correlated) with Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of Microelectronics i.e., Microelectronics and Integrated Service go up and down completely randomly.
Pair Corralation between Microelectronics and Integrated Service
Assuming the 90 days trading horizon Microelectronics Technology is expected to under-perform the Integrated Service. But the stock apears to be less risky and, when comparing its historical volatility, Microelectronics Technology is 1.14 times less risky than Integrated Service. The stock trades about -0.01 of its potential returns per unit of risk. The Integrated Service Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12,850 in Integrated Service Technology on August 26, 2024 and sell it today you would earn a total of 1,600 from holding Integrated Service Technology or generate 12.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microelectronics Technology vs. Integrated Service Technology
Performance |
| Timeline |
| Microelectronics Tec |
| Integrated Service |
Microelectronics and Integrated Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microelectronics and Integrated Service
The main advantage of trading using opposite Microelectronics and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microelectronics position performs unexpectedly, Integrated Service 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 Integrated Service will offset losses from the drop in Integrated Service's long position.| Microelectronics vs. Novatek Microelectronics Corp | Microelectronics vs. Quanta Computer | Microelectronics vs. United Microelectronics |
| Integrated Service vs. U Ming Marine Transport | Integrated Service vs. Shan Loong Transportation Co | Integrated Service vs. Microelectronics Technology | Integrated Service vs. Ligitek Electronics Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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