Correlation Between Asia Vital and Unimicron Technology
Can any of the company-specific risk be diversified away by investing in both Asia Vital and Unimicron Technology 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 Asia Vital and Unimicron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Vital Components and Unimicron Technology Corp, you can compare the effects of market volatilities on Asia Vital and Unimicron Technology 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 Asia Vital with a short position of Unimicron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Vital and Unimicron Technology.
Diversification Opportunities for Asia Vital and Unimicron Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asia and Unimicron is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Asia Vital Components and Unimicron Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unimicron Technology Corp and Asia Vital 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 Asia Vital Components are associated (or correlated) with Unimicron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unimicron Technology Corp has no effect on the direction of Asia Vital i.e., Asia Vital and Unimicron Technology go up and down completely randomly.
Pair Corralation between Asia Vital and Unimicron Technology
Assuming the 90 days trading horizon Asia Vital Components is expected to generate 1.36 times more return on investment than Unimicron Technology. However, Asia Vital is 1.36 times more volatile than Unimicron Technology Corp. It trades about 0.1 of its potential returns per unit of risk. Unimicron Technology Corp is currently generating about 0.0 per unit of risk. If you would invest 20,550 in Asia Vital Components on September 2, 2024 and sell it today you would earn a total of 43,750 from holding Asia Vital Components or generate 212.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Vital Components vs. Unimicron Technology Corp
Performance |
| Timeline |
| Asia Vital Components |
| Unimicron Technology Corp |
Asia Vital and Unimicron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Vital and Unimicron Technology
The main advantage of trading using opposite Asia Vital and Unimicron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Vital position performs unexpectedly, Unimicron Technology 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 Unimicron Technology will offset losses from the drop in Unimicron Technology's long position.| Asia Vital vs. Unimicron Technology Corp | Asia Vital vs. Asia Optical Co | Asia Vital vs. Kinsus Interconnect Technology | Asia Vital vs. Novatek Microelectronics 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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