Correlation Between Unimicron Technology and Niko Semiconductor
Can any of the company-specific risk be diversified away by investing in both Unimicron Technology and Niko Semiconductor 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 Niko Semiconductor 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 Niko Semiconductor Co, you can compare the effects of market volatilities on Unimicron Technology and Niko Semiconductor 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 Niko Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unimicron Technology and Niko Semiconductor.
Diversification Opportunities for Unimicron Technology and Niko Semiconductor
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Unimicron and Niko is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Unimicron Technology Corp and Niko Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niko Semiconductor 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 Niko Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niko Semiconductor has no effect on the direction of Unimicron Technology i.e., Unimicron Technology and Niko Semiconductor go up and down completely randomly.
Pair Corralation between Unimicron Technology and Niko Semiconductor
Assuming the 90 days trading horizon Unimicron Technology Corp is expected to under-perform the Niko Semiconductor. In addition to that, Unimicron Technology is 1.06 times more volatile than Niko Semiconductor Co. It trades about -0.16 of its total potential returns per unit of risk. Niko Semiconductor Co is currently generating about 0.17 per unit of volatility. If you would invest 4,590 in Niko Semiconductor Co on August 30, 2024 and sell it today you would earn a total of 360.00 from holding Niko Semiconductor Co or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unimicron Technology Corp vs. Niko Semiconductor Co
Performance |
| Timeline |
| Unimicron Technology Corp |
| Niko Semiconductor |
Unimicron Technology and Niko Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unimicron Technology and Niko Semiconductor
The main advantage of trading using opposite Unimicron Technology and Niko Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimicron Technology position performs unexpectedly, Niko Semiconductor 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 Niko Semiconductor will offset losses from the drop in Niko Semiconductor's 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 |
| Niko Semiconductor vs. Taiwan Semiconductor Manufacturing | Niko Semiconductor vs. MediaTek | Niko Semiconductor vs. United Microelectronics | Niko Semiconductor 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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