Correlation Between Macronix International and United Microelectronics
Can any of the company-specific risk be diversified away by investing in both Macronix International and United Microelectronics 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 Macronix International and United Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macronix International Co and United Microelectronics, you can compare the effects of market volatilities on Macronix International and United Microelectronics 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 Macronix International with a short position of United Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macronix International and United Microelectronics.
Diversification Opportunities for Macronix International and United Microelectronics
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Macronix and United is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Macronix International Co and United Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Microelectronics and Macronix International 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 Macronix International Co are associated (or correlated) with United Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Microelectronics has no effect on the direction of Macronix International i.e., Macronix International and United Microelectronics go up and down completely randomly.
Pair Corralation between Macronix International and United Microelectronics
Assuming the 90 days trading horizon Macronix International Co is expected to under-perform the United Microelectronics. In addition to that, Macronix International is 1.96 times more volatile than United Microelectronics. It trades about -0.24 of its total potential returns per unit of risk. United Microelectronics is currently generating about -0.29 per unit of volatility. If you would invest 4,925 in United Microelectronics on August 29, 2024 and sell it today you would lose (385.00) from holding United Microelectronics or give up 7.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macronix International Co vs. United Microelectronics
Performance |
| Timeline |
| Macronix International |
| United Microelectronics |
Macronix International and United Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macronix International and United Microelectronics
The main advantage of trading using opposite Macronix International and United Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macronix International position performs unexpectedly, United Microelectronics 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 United Microelectronics will offset losses from the drop in United Microelectronics' long position.| Macronix International vs. Winbond Electronics Corp | Macronix International vs. United Microelectronics | Macronix International vs. Mosel Vitelic | Macronix International vs. VIA Technologies |
| United Microelectronics vs. AU Optronics | United Microelectronics vs. Macronix International Co | United Microelectronics vs. Winbond Electronics Corp | United Microelectronics vs. Hon Hai Precision |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |