Correlation Between Da Cin and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Da Cin 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 Da Cin and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Da Cin Construction Co and Universal Microelectronics Co, you can compare the effects of market volatilities on Da Cin 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 Da Cin with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Da Cin and Universal Microelectronics.
Diversification Opportunities for Da Cin and Universal Microelectronics
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 2535 and Universal is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Da Cin Construction Co and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and Da Cin 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 Da Cin Construction Co 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 Da Cin i.e., Da Cin and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Da Cin and Universal Microelectronics
Assuming the 90 days trading horizon Da Cin Construction Co is expected to generate 0.63 times more return on investment than Universal Microelectronics. However, Da Cin Construction Co is 1.59 times less risky than Universal Microelectronics. It trades about 0.08 of its potential returns per unit of risk. Universal Microelectronics Co is currently generating about 0.01 per unit of risk. If you would invest 2,965 in Da Cin Construction Co on September 3, 2024 and sell it today you would earn a total of 2,065 from holding Da Cin Construction Co or generate 69.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Da Cin Construction Co vs. Universal Microelectronics Co
Performance |
| Timeline |
| Da Cin Construction |
| Universal Microelectronics |
Da Cin and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Da Cin and Universal Microelectronics
The main advantage of trading using opposite Da Cin and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Da Cin 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.| Da Cin vs. Universal Microelectronics Co | Da Cin vs. AVerMedia Technologies | Da Cin vs. Symtek Automation Asia | Da Cin 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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