Correlation Between Chia Chang and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Chia Chang 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 Chia Chang and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Chang Co and Universal Microelectronics Co, you can compare the effects of market volatilities on Chia Chang 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 Chia Chang with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and Universal Microelectronics.
Diversification Opportunities for Chia Chang and Universal Microelectronics
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chia and Universal is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and Chia Chang 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 Chia Chang Co 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 Chia Chang i.e., Chia Chang and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Chia Chang and Universal Microelectronics
Assuming the 90 days trading horizon Chia Chang Co is expected to generate 0.46 times more return on investment than Universal Microelectronics. However, Chia Chang Co is 2.15 times less risky than Universal Microelectronics. It trades about -0.11 of its potential returns per unit of risk. Universal Microelectronics Co is currently generating about -0.09 per unit of risk. If you would invest 4,285 in Chia Chang Co on September 5, 2024 and sell it today you would lose (140.00) from holding Chia Chang Co or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chia Chang Co vs. Universal Microelectronics Co
Performance |
| Timeline |
| Chia Chang |
| Universal Microelectronics |
Chia Chang and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Chang and Universal Microelectronics
The main advantage of trading using opposite Chia Chang and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang 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.| Chia Chang vs. Universal Microelectronics Co | Chia Chang vs. AVerMedia Technologies | Chia Chang vs. Symtek Automation Asia | Chia Chang vs. WiseChip 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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