Correlation Between KS Terminals and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both KS Terminals 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 KS Terminals and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KS Terminals and Universal Microelectronics Co, you can compare the effects of market volatilities on KS Terminals 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 KS Terminals with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KS Terminals and Universal Microelectronics.
Diversification Opportunities for KS Terminals and Universal Microelectronics
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 3003 and Universal is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding KS Terminals and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and KS Terminals 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 KS Terminals 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 KS Terminals i.e., KS Terminals and Universal Microelectronics go up and down completely randomly.
Pair Corralation between KS Terminals and Universal Microelectronics
Assuming the 90 days trading horizon KS Terminals is expected to generate 1.18 times more return on investment than Universal Microelectronics. However, KS Terminals is 1.18 times more volatile than Universal Microelectronics Co. It trades about 0.06 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 7,550 in KS Terminals on September 4, 2024 and sell it today you would earn a total of 230.00 from holding KS Terminals or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KS Terminals vs. Universal Microelectronics Co
Performance |
| Timeline |
| KS Terminals |
| Universal Microelectronics |
KS Terminals and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KS Terminals and Universal Microelectronics
The main advantage of trading using opposite KS Terminals and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KS Terminals 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.| KS Terminals vs. Sinbon Electronics Co | KS Terminals vs. WT Microelectronics Co | KS Terminals vs. Asia Optical Co | KS Terminals vs. Asia Vital Components |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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