Correlation Between Unimicron Technology and Merry Electronics
Can any of the company-specific risk be diversified away by investing in both Unimicron Technology and Merry Electronics 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 Unimicron Technology and Merry Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unimicron Technology Corp and Merry Electronics Co, you can compare the effects of market volatilities on Unimicron Technology and Merry Electronics 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 Unimicron Technology with a short position of Merry Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unimicron Technology and Merry Electronics.
Diversification Opportunities for Unimicron Technology and Merry Electronics
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Unimicron and Merry is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Unimicron Technology Corp and Merry Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merry Electronics and Unimicron Technology 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 Unimicron Technology Corp are associated (or correlated) with Merry Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merry Electronics has no effect on the direction of Unimicron Technology i.e., Unimicron Technology and Merry Electronics go up and down completely randomly.
Pair Corralation between Unimicron Technology and Merry Electronics
Assuming the 90 days trading horizon Unimicron Technology Corp is expected to under-perform the Merry Electronics. In addition to that, Unimicron Technology is 1.38 times more volatile than Merry Electronics Co. It trades about -0.1 of its total potential returns per unit of risk. Merry Electronics Co is currently generating about -0.02 per unit of volatility. If you would invest 10,700 in Merry Electronics Co on October 25, 2024 and sell it today you would lose (100.00) from holding Merry Electronics Co or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unimicron Technology Corp vs. Merry Electronics Co
Performance |
| Timeline |
| Unimicron Technology Corp |
| Merry Electronics |
Unimicron Technology and Merry Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unimicron Technology and Merry Electronics
The main advantage of trading using opposite Unimicron Technology and Merry Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimicron Technology position performs unexpectedly, Merry Electronics 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 Merry Electronics will offset losses from the drop in Merry Electronics' long position.| Unimicron Technology vs. Nan Ya Printed | Unimicron Technology vs. Kinsus Interconnect Technology | Unimicron Technology vs. Novatek Microelectronics Corp | Unimicron Technology vs. LARGAN Precision Co |
| Merry Electronics vs. Unimicron Technology Corp | Merry Electronics vs. Kinsus Interconnect Technology | Merry Electronics vs. Novatek Microelectronics Corp | Merry Electronics vs. Delta Electronics |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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