Correlation Between Sunplus Technology and United Microelectronics
Can any of the company-specific risk be diversified away by investing in both Sunplus Technology 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 Sunplus Technology and United Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunplus Technology Co and United Microelectronics, you can compare the effects of market volatilities on Sunplus Technology 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 Sunplus Technology with a short position of United Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunplus Technology and United Microelectronics.
Diversification Opportunities for Sunplus Technology and United Microelectronics
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunplus and United is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sunplus Technology Co and United Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Microelectronics and Sunplus Technology 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 Sunplus Technology 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 Sunplus Technology i.e., Sunplus Technology and United Microelectronics go up and down completely randomly.
Pair Corralation between Sunplus Technology and United Microelectronics
Assuming the 90 days trading horizon Sunplus Technology Co is expected to generate 1.28 times more return on investment than United Microelectronics. However, Sunplus Technology is 1.28 times more volatile than United Microelectronics. It trades about -0.13 of its potential returns per unit of risk. United Microelectronics is currently generating about -0.32 per unit of risk. If you would invest 2,945 in Sunplus Technology Co on August 31, 2024 and sell it today you would lose (145.00) from holding Sunplus Technology Co or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunplus Technology Co vs. United Microelectronics
Performance |
| Timeline |
| Sunplus Technology |
| United Microelectronics |
Sunplus Technology and United Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunplus Technology and United Microelectronics
The main advantage of trading using opposite Sunplus Technology and United Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunplus Technology 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.| Sunplus Technology vs. United Microelectronics | Sunplus Technology vs. Winbond Electronics Corp | Sunplus Technology vs. Macronix International Co |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |