Correlation Between First Steamship and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both First Steamship 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 First Steamship and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Steamship Co and Universal Microelectronics Co, you can compare the effects of market volatilities on First Steamship 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 First Steamship with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Steamship and Universal Microelectronics.
Diversification Opportunities for First Steamship and Universal Microelectronics
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Universal is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding First Steamship 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 First Steamship 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 First Steamship 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 First Steamship i.e., First Steamship and Universal Microelectronics go up and down completely randomly.
Pair Corralation between First Steamship and Universal Microelectronics
Assuming the 90 days trading horizon First Steamship Co is expected to under-perform the Universal Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, First Steamship Co is 2.93 times less risky than Universal Microelectronics. The stock trades about -0.28 of its potential returns per unit of risk. The Universal Microelectronics Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,650 in Universal Microelectronics Co on September 12, 2024 and sell it today you would lose (90.00) from holding Universal Microelectronics Co or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Steamship Co vs. Universal Microelectronics Co
Performance |
| Timeline |
| First Steamship |
| Universal Microelectronics |
First Steamship and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Steamship and Universal Microelectronics
The main advantage of trading using opposite First Steamship and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Steamship 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.| First Steamship vs. Sincere Navigation Corp | First Steamship vs. Evergreen International Storage | First Steamship vs. Far Eastern Department | First Steamship vs. Hung Sheng Construction |
| Universal Microelectronics vs. AU Optronics | Universal Microelectronics vs. Innolux Corp | Universal Microelectronics vs. Ruentex Development Co | Universal Microelectronics 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |