Correlation Between Avalue Technology and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Avalue Technology and Universal 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 Avalue Technology and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avalue Technology and Universal Microelectronics Co, you can compare the effects of market volatilities on Avalue Technology and Universal 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 Avalue Technology with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avalue Technology and Universal Microelectronics.
Diversification Opportunities for Avalue Technology and Universal Microelectronics
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Avalue and Universal is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Avalue Technology and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and Avalue 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 Avalue Technology are associated (or correlated) with Universal Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Microelectronics has no effect on the direction of Avalue Technology i.e., Avalue Technology and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Avalue Technology and Universal Microelectronics
Assuming the 90 days trading horizon Avalue Technology is expected to generate 0.39 times more return on investment than Universal Microelectronics. However, Avalue Technology is 2.59 times less risky than Universal Microelectronics. It trades about -0.07 of its potential returns per unit of risk. Universal Microelectronics Co is currently generating about -0.03 per unit of risk. If you would invest 10,200 in Avalue Technology on August 30, 2024 and sell it today you would lose (260.00) from holding Avalue Technology or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avalue Technology vs. Universal Microelectronics Co
Performance |
| Timeline |
| Avalue Technology |
| Universal Microelectronics |
Avalue Technology and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avalue Technology and Universal Microelectronics
The main advantage of trading using opposite Avalue Technology and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalue Technology position performs unexpectedly, Universal 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 Universal Microelectronics will offset losses from the drop in Universal Microelectronics' long position.| Avalue Technology vs. International CSRC Investment | Avalue Technology vs. Farglory FTZ Investment | Avalue Technology vs. ReaLy Development Construction | Avalue Technology vs. Chung Hsin Electric Machinery |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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