Correlation Between CyberTAN Technology and United Microelectronics
Can any of the company-specific risk be diversified away by investing in both CyberTAN Technology and United Microelectronics 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 CyberTAN Technology and United Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CyberTAN Technology and United Microelectronics, you can compare the effects of market volatilities on CyberTAN Technology and United Microelectronics 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 CyberTAN Technology with a short position of United Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberTAN Technology and United Microelectronics.
Diversification Opportunities for CyberTAN Technology and United Microelectronics
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between CyberTAN and United is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding CyberTAN Technology and United Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Microelectronics and CyberTAN 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 CyberTAN Technology are associated (or correlated) with United Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Microelectronics has no effect on the direction of CyberTAN Technology i.e., CyberTAN Technology and United Microelectronics go up and down completely randomly.
Pair Corralation between CyberTAN Technology and United Microelectronics
Assuming the 90 days trading horizon CyberTAN Technology is expected to generate 2.1 times more return on investment than United Microelectronics. However, CyberTAN Technology is 2.1 times more volatile than United Microelectronics. It trades about 0.07 of its potential returns per unit of risk. United Microelectronics is currently generating about -0.08 per unit of risk. If you would invest 2,495 in CyberTAN Technology on September 3, 2024 and sell it today you would earn a total of 710.00 from holding CyberTAN Technology or generate 28.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CyberTAN Technology vs. United Microelectronics
Performance |
| Timeline |
| CyberTAN Technology |
| United Microelectronics |
CyberTAN Technology and United Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CyberTAN Technology and United Microelectronics
The main advantage of trading using opposite CyberTAN Technology and United Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberTAN Technology position performs unexpectedly, United Microelectronics 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 United Microelectronics will offset losses from the drop in United Microelectronics' long position.| CyberTAN Technology vs. Gemtek Technology Co | CyberTAN Technology vs. Alpha Networks | CyberTAN Technology vs. Pan International Industrial Corp | CyberTAN Technology vs. D Link Corp |
| United Microelectronics vs. Taiwan Semiconductor Manufacturing | United Microelectronics vs. Yang Ming Marine | United Microelectronics vs. ASE Industrial Holding | United Microelectronics vs. AU Optronics |
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.
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