Correlation Between Etron Technology and Global Unichip
Can any of the company-specific risk be diversified away by investing in both Etron 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 Etron 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 Etron Technology and Global Unichip Corp, you can compare the effects of market volatilities on Etron 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 Etron Technology with a short position of Global Unichip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etron Technology and Global Unichip.
Diversification Opportunities for Etron Technology and Global Unichip
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Etron and Global is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Etron 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 Etron 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 Etron 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 Etron Technology i.e., Etron Technology and Global Unichip go up and down completely randomly.
Pair Corralation between Etron Technology and Global Unichip
Assuming the 90 days trading horizon Etron Technology is expected to under-perform the Global Unichip. But the stock apears to be less risky and, when comparing its historical volatility, Etron Technology is 1.42 times less risky than Global Unichip. The stock trades about 0.0 of its potential returns per unit of risk. The Global Unichip Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 72,600 in Global Unichip Corp on September 13, 2024 and sell it today you would earn a total of 52,400 from holding Global Unichip Corp or generate 72.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etron Technology vs. Global Unichip Corp
Performance |
| Timeline |
| Etron Technology |
| Global Unichip Corp |
Etron Technology and Global Unichip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etron Technology and Global Unichip
The main advantage of trading using opposite Etron Technology and Global Unichip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etron 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.| Etron Technology vs. Sunplus Technology Co | Etron Technology vs. Realtek Semiconductor Corp | Etron Technology vs. Winbond Electronics Corp | Etron Technology vs. VIA Technologies |
| Global Unichip vs. AU Optronics | Global Unichip vs. Innolux Corp | Global Unichip vs. Ruentex Development Co | Global Unichip 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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