Correlation Between Universal Microelectronics and U Ming
Can any of the company-specific risk be diversified away by investing in both Universal Microelectronics and U Ming 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 Universal Microelectronics and U Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Microelectronics Co and U Ming Marine Transport, you can compare the effects of market volatilities on Universal Microelectronics and U Ming 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 Universal Microelectronics with a short position of U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Microelectronics and U Ming.
Diversification Opportunities for Universal Microelectronics and U Ming
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and 2606 is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Universal Microelectronics Co and U Ming Marine Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Ming Marine and Universal 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 Universal Microelectronics Co are associated (or correlated) with U Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Ming Marine has no effect on the direction of Universal Microelectronics i.e., Universal Microelectronics and U Ming go up and down completely randomly.
Pair Corralation between Universal Microelectronics and U Ming
Assuming the 90 days trading horizon Universal Microelectronics Co is expected to under-perform the U Ming. In addition to that, Universal Microelectronics is 1.14 times more volatile than U Ming Marine Transport. It trades about -0.01 of its total potential returns per unit of risk. U Ming Marine Transport is currently generating about 0.03 per unit of volatility. If you would invest 5,250 in U Ming Marine Transport on September 4, 2024 and sell it today you would earn a total of 600.00 from holding U Ming Marine Transport or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Microelectronics Co vs. U Ming Marine Transport
Performance |
| Timeline |
| Universal Microelectronics |
| U Ming Marine |
Universal Microelectronics and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Microelectronics and U Ming
The main advantage of trading using opposite Universal Microelectronics and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Microelectronics position performs unexpectedly, U Ming 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 U Ming will offset losses from the drop in U Ming's long position.| Universal Microelectronics vs. Taiwan Semiconductor Manufacturing | Universal Microelectronics vs. Yang Ming Marine | Universal Microelectronics vs. AU Optronics | Universal Microelectronics vs. Innolux Corp |
| U Ming vs. Universal Microelectronics Co | U Ming vs. AVerMedia Technologies | U Ming vs. Symtek Automation Asia | U Ming vs. WiseChip Semiconductor |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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