Correlation Between Microelectronics and Yuan High
Can any of the company-specific risk be diversified away by investing in both Microelectronics and Yuan High 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 Yuan High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microelectronics Technology and Yuan High Tech Development, you can compare the effects of market volatilities on Microelectronics and Yuan High 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 Yuan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microelectronics and Yuan High.
Diversification Opportunities for Microelectronics and Yuan High
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microelectronics and Yuan is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Microelectronics Technology and Yuan High Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan High Tech 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 Yuan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan High Tech has no effect on the direction of Microelectronics i.e., Microelectronics and Yuan High go up and down completely randomly.
Pair Corralation between Microelectronics and Yuan High
Assuming the 90 days trading horizon Microelectronics Technology is expected to under-perform the Yuan High. But the stock apears to be less risky and, when comparing its historical volatility, Microelectronics Technology is 1.29 times less risky than Yuan High. The stock trades about -0.01 of its potential returns per unit of risk. The Yuan High Tech Development is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 16,885 in Yuan High Tech Development on August 26, 2024 and sell it today you would lose (1,685) from holding Yuan High Tech Development or give up 9.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microelectronics Technology vs. Yuan High Tech Development
Performance |
| Timeline |
| Microelectronics Tec |
| Yuan High Tech |
Microelectronics and Yuan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microelectronics and Yuan High
The main advantage of trading using opposite Microelectronics and Yuan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microelectronics position performs unexpectedly, Yuan High 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 Yuan High will offset losses from the drop in Yuan High's long position.| Microelectronics vs. Novatek Microelectronics Corp | Microelectronics vs. Quanta Computer | Microelectronics vs. United Microelectronics |
| Yuan High vs. Novatek Microelectronics Corp | Yuan High vs. Quanta Computer | Yuan High vs. United Microelectronics |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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