Correlation Between Unimicron Technology and Leatec Fine
Can any of the company-specific risk be diversified away by investing in both Unimicron Technology and Leatec Fine 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 Leatec Fine 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 Leatec Fine Ceramics, you can compare the effects of market volatilities on Unimicron Technology and Leatec Fine 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 Leatec Fine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unimicron Technology and Leatec Fine.
Diversification Opportunities for Unimicron Technology and Leatec Fine
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Unimicron and Leatec is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Unimicron Technology Corp and Leatec Fine Ceramics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leatec Fine Ceramics 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 Leatec Fine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leatec Fine Ceramics has no effect on the direction of Unimicron Technology i.e., Unimicron Technology and Leatec Fine go up and down completely randomly.
Pair Corralation between Unimicron Technology and Leatec Fine
Assuming the 90 days trading horizon Unimicron Technology Corp is expected to generate 1.2 times more return on investment than Leatec Fine. However, Unimicron Technology is 1.2 times more volatile than Leatec Fine Ceramics. It trades about -0.04 of its potential returns per unit of risk. Leatec Fine Ceramics is currently generating about -0.28 per unit of risk. If you would invest 14,150 in Unimicron Technology Corp on October 29, 2024 and sell it today you would lose (250.00) from holding Unimicron Technology Corp or give up 1.77% 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. Leatec Fine Ceramics
Performance |
| Timeline |
| Unimicron Technology Corp |
| Leatec Fine Ceramics |
Unimicron Technology and Leatec Fine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unimicron Technology and Leatec Fine
The main advantage of trading using opposite Unimicron Technology and Leatec Fine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimicron Technology position performs unexpectedly, Leatec Fine 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 Leatec Fine will offset losses from the drop in Leatec Fine'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 |
| Leatec Fine vs. WIN Semiconductors | Leatec Fine vs. Visual Photonics Epitaxy | Leatec Fine vs. GlobalWafers Co | Leatec Fine vs. Unimicron Technology 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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