Correlation Between Unimicron Technology and E Ink
Can any of the company-specific risk be diversified away by investing in both Unimicron Technology and E Ink 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 E Ink 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 E Ink Holdings, you can compare the effects of market volatilities on Unimicron Technology and E Ink 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 E Ink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unimicron Technology and E Ink.
Diversification Opportunities for Unimicron Technology and E Ink
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Unimicron and 8069 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Unimicron Technology Corp and E Ink Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Ink Holdings 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 E Ink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Ink Holdings has no effect on the direction of Unimicron Technology i.e., Unimicron Technology and E Ink go up and down completely randomly.
Pair Corralation between Unimicron Technology and E Ink
Assuming the 90 days trading horizon Unimicron Technology Corp is expected to under-perform the E Ink. But the stock apears to be less risky and, when comparing its historical volatility, Unimicron Technology Corp is 1.06 times less risky than E Ink. The stock trades about -0.18 of its potential returns per unit of risk. The E Ink Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 26,300 in E Ink Holdings on November 3, 2024 and sell it today you would earn a total of 1,750 from holding E Ink Holdings or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unimicron Technology Corp vs. E Ink Holdings
Performance |
| Timeline |
| Unimicron Technology Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| E Ink Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Unimicron Technology and E Ink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unimicron Technology and E Ink
The main advantage of trading using opposite Unimicron Technology and E Ink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimicron Technology position performs unexpectedly, E Ink 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 E Ink will offset losses from the drop in E Ink's long position.The idea behind Unimicron Technology Corp and E Ink Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |