Correlation Between Mirle Automation and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Mirle Automation and Universal 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 Mirle Automation and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirle Automation Corp and Universal Microelectronics Co, you can compare the effects of market volatilities on Mirle Automation and Universal 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 Mirle Automation with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirle Automation and Universal Microelectronics.
Diversification Opportunities for Mirle Automation and Universal Microelectronics
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mirle and Universal is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mirle Automation Corp and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and Mirle Automation 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 Mirle Automation Corp are associated (or correlated) with Universal Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Microelectronics has no effect on the direction of Mirle Automation i.e., Mirle Automation and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Mirle Automation and Universal Microelectronics
Assuming the 90 days trading horizon Mirle Automation Corp is expected to generate 0.74 times more return on investment than Universal Microelectronics. However, Mirle Automation Corp is 1.35 times less risky than Universal Microelectronics. It trades about 0.01 of its potential returns per unit of risk. Universal Microelectronics Co is currently generating about -0.09 per unit of risk. If you would invest 7,740 in Mirle Automation Corp on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Mirle Automation Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirle Automation Corp vs. Universal Microelectronics Co
Performance |
| Timeline |
| Mirle Automation Corp |
| Universal Microelectronics |
Mirle Automation and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirle Automation and Universal Microelectronics
The main advantage of trading using opposite Mirle Automation and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirle Automation position performs unexpectedly, Universal 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 Universal Microelectronics will offset losses from the drop in Universal Microelectronics' long position.| Mirle Automation vs. United Integrated Services | Mirle Automation vs. Greatek Electronics | Mirle Automation vs. Merry Electronics Co | Mirle Automation vs. Transcend Information |
| Universal Microelectronics vs. Taiwan Semiconductor Manufacturing | Universal Microelectronics vs. Yang Ming Marine | Universal Microelectronics vs. AU Optronics | Universal Microelectronics vs. Innolux Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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