Correlation Between Shih Wei and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Shih Wei 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 Shih Wei and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shih Wei Navigation and Universal Microelectronics Co, you can compare the effects of market volatilities on Shih Wei 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 Shih Wei with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shih Wei and Universal Microelectronics.
Diversification Opportunities for Shih Wei and Universal Microelectronics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shih and Universal is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shih Wei Navigation and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and Shih Wei 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 Shih Wei Navigation 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 Shih Wei i.e., Shih Wei and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Shih Wei and Universal Microelectronics
Assuming the 90 days trading horizon Shih Wei Navigation is expected to generate 0.58 times more return on investment than Universal Microelectronics. However, Shih Wei Navigation is 1.72 times less risky than Universal Microelectronics. It trades about 0.02 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 1,780 in Shih Wei Navigation on September 5, 2024 and sell it today you would earn a total of 5.00 from holding Shih Wei Navigation or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shih Wei Navigation vs. Universal Microelectronics Co
Performance |
| Timeline |
| Shih Wei Navigation |
| Universal Microelectronics |
Shih Wei and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shih Wei and Universal Microelectronics
The main advantage of trading using opposite Shih Wei and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shih Wei 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.| Shih Wei vs. Universal Microelectronics Co | Shih Wei vs. AVerMedia Technologies | Shih Wei vs. Symtek Automation Asia | Shih Wei 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |