Correlation Between Unimicron Technology and Formosa Sumco
Can any of the company-specific risk be diversified away by investing in both Unimicron Technology and Formosa Sumco 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 Formosa Sumco 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 Formosa Sumco Technology, you can compare the effects of market volatilities on Unimicron Technology and Formosa Sumco 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 Formosa Sumco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unimicron Technology and Formosa Sumco.
Diversification Opportunities for Unimicron Technology and Formosa Sumco
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unimicron and Formosa is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Unimicron Technology Corp and Formosa Sumco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formosa Sumco Technology 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 Formosa Sumco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formosa Sumco Technology has no effect on the direction of Unimicron Technology i.e., Unimicron Technology and Formosa Sumco go up and down completely randomly.
Pair Corralation between Unimicron Technology and Formosa Sumco
Assuming the 90 days trading horizon Unimicron Technology Corp is expected to under-perform the Formosa Sumco. In addition to that, Unimicron Technology is 1.25 times more volatile than Formosa Sumco Technology. It trades about -0.16 of its total potential returns per unit of risk. Formosa Sumco Technology is currently generating about -0.09 per unit of volatility. If you would invest 11,900 in Formosa Sumco Technology on August 30, 2024 and sell it today you would lose (450.00) from holding Formosa Sumco Technology or give up 3.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unimicron Technology Corp vs. Formosa Sumco Technology
Performance |
| Timeline |
| Unimicron Technology Corp |
| Formosa Sumco Technology |
Unimicron Technology and Formosa Sumco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unimicron Technology and Formosa Sumco
The main advantage of trading using opposite Unimicron Technology and Formosa Sumco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimicron Technology position performs unexpectedly, Formosa Sumco 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 Formosa Sumco will offset losses from the drop in Formosa Sumco'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 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |