Correlation Between Chung Lien and UPI Semiconductor
Can any of the company-specific risk be diversified away by investing in both Chung Lien and UPI Semiconductor 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 Chung Lien and UPI Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Lien Transportation and uPI Semiconductor Corp, you can compare the effects of market volatilities on Chung Lien and UPI Semiconductor 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 Chung Lien with a short position of UPI Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Lien and UPI Semiconductor.
Diversification Opportunities for Chung Lien and UPI Semiconductor
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chung and UPI is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Chung Lien Transportation and uPI Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on uPI Semiconductor Corp and Chung Lien 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 Chung Lien Transportation are associated (or correlated) with UPI Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of uPI Semiconductor Corp has no effect on the direction of Chung Lien i.e., Chung Lien and UPI Semiconductor go up and down completely randomly.
Pair Corralation between Chung Lien and UPI Semiconductor
Assuming the 90 days trading horizon Chung Lien Transportation is expected to generate 0.4 times more return on investment than UPI Semiconductor. However, Chung Lien Transportation is 2.52 times less risky than UPI Semiconductor. It trades about 0.02 of its potential returns per unit of risk. uPI Semiconductor Corp is currently generating about -0.09 per unit of risk. If you would invest 4,180 in Chung Lien Transportation on August 31, 2024 and sell it today you would earn a total of 55.00 from holding Chung Lien Transportation or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Lien Transportation vs. uPI Semiconductor Corp
Performance |
| Timeline |
| Chung Lien Transportation |
| uPI Semiconductor Corp |
Chung Lien and UPI Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Lien and UPI Semiconductor
The main advantage of trading using opposite Chung Lien and UPI Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Lien position performs unexpectedly, UPI Semiconductor 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 UPI Semiconductor will offset losses from the drop in UPI Semiconductor's long position.| Chung Lien vs. Kerry TJ Logistics | Chung Lien vs. Shan Loong Transportation Co | Chung Lien vs. YuantaP shares Taiwan Electronics | Chung Lien vs. YuantaP shares Taiwan Top |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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