Correlation Between Eva Airways and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Eva Airways 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 Eva Airways and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eva Airways Corp and Universal Microelectronics Co, you can compare the effects of market volatilities on Eva Airways 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 Eva Airways with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eva Airways and Universal Microelectronics.
Diversification Opportunities for Eva Airways and Universal Microelectronics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eva and Universal is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways 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 Eva Airways 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 Eva Airways 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 Eva Airways i.e., Eva Airways and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Eva Airways and Universal Microelectronics
Assuming the 90 days trading horizon Eva Airways Corp is expected to generate 0.78 times more return on investment than Universal Microelectronics. However, Eva Airways Corp is 1.28 times less risky than Universal Microelectronics. It trades about 0.03 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 3,985 in Eva Airways Corp on September 12, 2024 and sell it today you would earn a total of 635.00 from holding Eva Airways Corp or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eva Airways Corp vs. Universal Microelectronics Co
Performance |
| Timeline |
| Eva Airways Corp |
| Universal Microelectronics |
Eva Airways and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eva Airways and Universal Microelectronics
The main advantage of trading using opposite Eva Airways and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eva Airways 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.| Eva Airways vs. China Airlines | Eva Airways vs. Evergreen Marine Corp | Eva Airways vs. Yang Ming Marine | Eva Airways vs. China Steel Corp |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| 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 |