Correlation Between Universal Microelectronics and Ingentec
Can any of the company-specific risk be diversified away by investing in both Universal Microelectronics and Ingentec 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 Ingentec 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 Ingentec, you can compare the effects of market volatilities on Universal Microelectronics and Ingentec 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 Ingentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Microelectronics and Ingentec.
Diversification Opportunities for Universal Microelectronics and Ingentec
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Universal and Ingentec is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Universal Microelectronics Co and Ingentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingentec 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 Ingentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingentec has no effect on the direction of Universal Microelectronics i.e., Universal Microelectronics and Ingentec go up and down completely randomly.
Pair Corralation between Universal Microelectronics and Ingentec
If you would invest 2,375 in Universal Microelectronics Co on October 15, 2024 and sell it today you would lose (15.00) from holding Universal Microelectronics Co or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Universal Microelectronics Co vs. Ingentec
Performance |
| Timeline |
| Universal Microelectronics |
| Ingentec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Universal Microelectronics and Ingentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Microelectronics and Ingentec
The main advantage of trading using opposite Universal Microelectronics and Ingentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Microelectronics position performs unexpectedly, Ingentec 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 Ingentec will offset losses from the drop in Ingentec's long position.The idea behind Universal Microelectronics Co and Ingentec pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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