Correlation Between Unimicron Technology and Wafer Works
Can any of the company-specific risk be diversified away by investing in both Unimicron Technology and Wafer Works 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 Wafer Works 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 Wafer Works, you can compare the effects of market volatilities on Unimicron Technology and Wafer Works 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 Wafer Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unimicron Technology and Wafer Works.
Diversification Opportunities for Unimicron Technology and Wafer Works
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Unimicron and Wafer is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Unimicron Technology Corp and Wafer Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wafer Works 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 Wafer Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wafer Works has no effect on the direction of Unimicron Technology i.e., Unimicron Technology and Wafer Works go up and down completely randomly.
Pair Corralation between Unimicron Technology and Wafer Works
Assuming the 90 days trading horizon Unimicron Technology Corp is expected to generate 1.81 times more return on investment than Wafer Works. However, Unimicron Technology is 1.81 times more volatile than Wafer Works. It trades about 0.01 of its potential returns per unit of risk. Wafer Works is currently generating about -0.04 per unit of risk. If you would invest 16,100 in Unimicron Technology Corp on August 30, 2024 and sell it today you would lose (1,100) from holding Unimicron Technology Corp or give up 6.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unimicron Technology Corp vs. Wafer Works
Performance |
| Timeline |
| Unimicron Technology Corp |
| Wafer Works |
Unimicron Technology and Wafer Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unimicron Technology and Wafer Works
The main advantage of trading using opposite Unimicron Technology and Wafer Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimicron Technology position performs unexpectedly, Wafer Works 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 Wafer Works will offset losses from the drop in Wafer Works' 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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