Correlation Between EMemory Technology and Global Unichip
Can any of the company-specific risk be diversified away by investing in both EMemory Technology and Global Unichip 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 EMemory Technology and Global Unichip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMemory Technology and Global Unichip Corp, you can compare the effects of market volatilities on EMemory Technology and Global Unichip 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 EMemory Technology with a short position of Global Unichip. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMemory Technology and Global Unichip.
Diversification Opportunities for EMemory Technology and Global Unichip
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EMemory and Global is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding eMemory Technology and Global Unichip Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Unichip Corp and EMemory 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 eMemory Technology are associated (or correlated) with Global Unichip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Unichip Corp has no effect on the direction of EMemory Technology i.e., EMemory Technology and Global Unichip go up and down completely randomly.
Pair Corralation between EMemory Technology and Global Unichip
Assuming the 90 days trading horizon eMemory Technology is expected to generate 1.06 times more return on investment than Global Unichip. However, EMemory Technology is 1.06 times more volatile than Global Unichip Corp. It trades about 0.06 of its potential returns per unit of risk. Global Unichip Corp is currently generating about 0.0 per unit of risk. If you would invest 184,232 in eMemory Technology on August 29, 2024 and sell it today you would earn a total of 99,268 from holding eMemory Technology or generate 53.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMemory Technology vs. Global Unichip Corp
Performance |
| Timeline |
| eMemory Technology |
| Global Unichip Corp |
EMemory Technology and Global Unichip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMemory Technology and Global Unichip
The main advantage of trading using opposite EMemory Technology and Global Unichip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMemory Technology position performs unexpectedly, Global Unichip 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 Global Unichip will offset losses from the drop in Global Unichip's long position.| EMemory Technology vs. Nan Ya Printed | EMemory Technology vs. Global Unichip Corp | EMemory Technology vs. Aspeed Technology | EMemory Technology vs. Alchip Technologies |
| Global Unichip vs. Sitronix Technology Corp | Global Unichip vs. Elan Microelectronics Corp | Global Unichip vs. Holtek Semiconductor |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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