Correlation Between Unimicron Technology and Zhen Ding
Can any of the company-specific risk be diversified away by investing in both Unimicron Technology and Zhen Ding 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 Zhen Ding 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 Zhen Ding Technology, you can compare the effects of market volatilities on Unimicron Technology and Zhen Ding 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 Zhen Ding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unimicron Technology and Zhen Ding.
Diversification Opportunities for Unimicron Technology and Zhen Ding
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unimicron and Zhen is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Unimicron Technology Corp and Zhen Ding Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhen Ding 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 Zhen Ding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhen Ding Technology has no effect on the direction of Unimicron Technology i.e., Unimicron Technology and Zhen Ding go up and down completely randomly.
Pair Corralation between Unimicron Technology and Zhen Ding
Assuming the 90 days trading horizon Unimicron Technology Corp is expected to generate 1.17 times more return on investment than Zhen Ding. However, Unimicron Technology is 1.17 times more volatile than Zhen Ding Technology. It trades about -0.09 of its potential returns per unit of risk. Zhen Ding Technology is currently generating about -0.15 per unit of risk. If you would invest 14,550 in Unimicron Technology Corp on October 24, 2024 and sell it today you would lose (600.00) from holding Unimicron Technology Corp or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unimicron Technology Corp vs. Zhen Ding Technology
Performance |
| Timeline |
| Unimicron Technology Corp |
| Zhen Ding Technology |
Unimicron Technology and Zhen Ding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unimicron Technology and Zhen Ding
The main advantage of trading using opposite Unimicron Technology and Zhen Ding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimicron Technology position performs unexpectedly, Zhen Ding 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 Zhen Ding will offset losses from the drop in Zhen Ding'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 |
| Zhen Ding vs. Unimicron Technology Corp | Zhen Ding vs. Flexium Interconnect | Zhen Ding vs. Catcher Technology Co | Zhen Ding vs. Pegatron 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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