Correlation Between Macronix International and Unitech Computer
Can any of the company-specific risk be diversified away by investing in both Macronix International and Unitech Computer 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 Unitech Computer 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 Unitech Computer Co, you can compare the effects of market volatilities on Macronix International and Unitech Computer 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 Unitech Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macronix International and Unitech Computer.
Diversification Opportunities for Macronix International and Unitech Computer
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Macronix and Unitech is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Macronix International Co and Unitech Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitech Computer 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 Unitech Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unitech Computer has no effect on the direction of Macronix International i.e., Macronix International and Unitech Computer go up and down completely randomly.
Pair Corralation between Macronix International and Unitech Computer
Assuming the 90 days trading horizon Macronix International Co is expected to under-perform the Unitech Computer. In addition to that, Macronix International is 2.1 times more volatile than Unitech Computer Co. It trades about -0.22 of its total potential returns per unit of risk. Unitech Computer Co is currently generating about 0.09 per unit of volatility. If you would invest 3,605 in Unitech Computer Co on September 2, 2024 and sell it today you would earn a total of 185.00 from holding Unitech Computer Co or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macronix International Co vs. Unitech Computer Co
Performance |
| Timeline |
| Macronix International |
| Unitech Computer |
Macronix International and Unitech Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macronix International and Unitech Computer
The main advantage of trading using opposite Macronix International and Unitech Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macronix International position performs unexpectedly, Unitech Computer 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 Unitech Computer will offset losses from the drop in Unitech Computer's long position.| Macronix International vs. Winbond Electronics Corp | Macronix International vs. United Microelectronics | Macronix International vs. Mosel Vitelic | Macronix International vs. VIA Technologies |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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