Correlation Between IEI Integration and United Microelectronics
Can any of the company-specific risk be diversified away by investing in both IEI Integration and United 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 IEI Integration and United Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IEI Integration Corp and United Microelectronics, you can compare the effects of market volatilities on IEI Integration and United 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 IEI Integration with a short position of United Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IEI Integration and United Microelectronics.
Diversification Opportunities for IEI Integration and United Microelectronics
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IEI and United is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding IEI Integration Corp and United Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Microelectronics and IEI Integration 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 IEI Integration Corp are associated (or correlated) with United Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Microelectronics has no effect on the direction of IEI Integration i.e., IEI Integration and United Microelectronics go up and down completely randomly.
Pair Corralation between IEI Integration and United Microelectronics
Assuming the 90 days trading horizon IEI Integration Corp is expected to generate 1.46 times more return on investment than United Microelectronics. However, IEI Integration is 1.46 times more volatile than United Microelectronics. It trades about 0.01 of its potential returns per unit of risk. United Microelectronics is currently generating about -0.31 per unit of risk. If you would invest 7,910 in IEI Integration Corp on September 3, 2024 and sell it today you would lose (10.00) from holding IEI Integration Corp or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IEI Integration Corp vs. United Microelectronics
Performance |
| Timeline |
| IEI Integration Corp |
| United Microelectronics |
IEI Integration and United Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IEI Integration and United Microelectronics
The main advantage of trading using opposite IEI Integration and United Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IEI Integration position performs unexpectedly, United 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 United Microelectronics will offset losses from the drop in United Microelectronics' long position.| IEI Integration vs. Advantech Co | IEI Integration vs. Getac Technology Corp | IEI Integration vs. Flytech Technology Co | IEI Integration vs. ADLINK Technology |
| United Microelectronics vs. Taiwan Semiconductor Manufacturing | United Microelectronics vs. Yang Ming Marine | United Microelectronics vs. ASE Industrial Holding | United Microelectronics vs. AU Optronics |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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