Correlation Between Unimicron Technology and Asia Optical
Can any of the company-specific risk be diversified away by investing in both Unimicron Technology and Asia Optical 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 Asia Optical 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 Asia Optical Co, you can compare the effects of market volatilities on Unimicron Technology and Asia Optical 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 Asia Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unimicron Technology and Asia Optical.
Diversification Opportunities for Unimicron Technology and Asia Optical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unimicron and Asia is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Unimicron Technology Corp and Asia Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Optical 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 Asia Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Optical has no effect on the direction of Unimicron Technology i.e., Unimicron Technology and Asia Optical go up and down completely randomly.
Pair Corralation between Unimicron Technology and Asia Optical
Assuming the 90 days trading horizon Unimicron Technology Corp is expected to under-perform the Asia Optical. In addition to that, Unimicron Technology is 1.2 times more volatile than Asia Optical Co. It trades about 0.0 of its total potential returns per unit of risk. Asia Optical Co is currently generating about 0.07 per unit of volatility. If you would invest 6,610 in Asia Optical Co on September 2, 2024 and sell it today you would earn a total of 4,140 from holding Asia Optical Co or generate 62.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unimicron Technology Corp vs. Asia Optical Co
Performance |
| Timeline |
| Unimicron Technology Corp |
| Asia Optical |
Unimicron Technology and Asia Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unimicron Technology and Asia Optical
The main advantage of trading using opposite Unimicron Technology and Asia Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimicron Technology position performs unexpectedly, Asia Optical 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 Asia Optical will offset losses from the drop in Asia Optical's long position.The idea behind Unimicron Technology Corp and Asia Optical Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Asia Optical vs. LARGAN Precision Co | Asia Optical vs. Novatek Microelectronics Corp | Asia Optical vs. Genius Electronic Optical | Asia Optical vs. Catcher Technology Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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