Correlation Between Hannstar Display and United Microelectronics
Can any of the company-specific risk be diversified away by investing in both Hannstar Display and United 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 Hannstar Display and United Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannstar Display Corp and United Microelectronics, you can compare the effects of market volatilities on Hannstar Display and United 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 Hannstar Display with a short position of United Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannstar Display and United Microelectronics.
Diversification Opportunities for Hannstar Display and United Microelectronics
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hannstar and United is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hannstar Display Corp and United Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Microelectronics and Hannstar Display 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 Hannstar Display Corp are associated (or correlated) with United Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Microelectronics has no effect on the direction of Hannstar Display i.e., Hannstar Display and United Microelectronics go up and down completely randomly.
Pair Corralation between Hannstar Display and United Microelectronics
Assuming the 90 days trading horizon Hannstar Display Corp is expected to generate 1.11 times more return on investment than United Microelectronics. However, Hannstar Display is 1.11 times more volatile than United Microelectronics. It trades about -0.1 of its potential returns per unit of risk. United Microelectronics is currently generating about -0.35 per unit of risk. If you would invest 906.00 in Hannstar Display Corp on September 1, 2024 and sell it today you would lose (29.00) from holding Hannstar Display Corp or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannstar Display Corp vs. United Microelectronics
Performance |
| Timeline |
| Hannstar Display Corp |
| United Microelectronics |
Hannstar Display and United Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannstar Display and United Microelectronics
The main advantage of trading using opposite Hannstar Display and United Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannstar Display position performs unexpectedly, United 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 United Microelectronics will offset losses from the drop in United Microelectronics' long position.The idea behind Hannstar Display Corp and United Microelectronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| United Microelectronics vs. AU Optronics | United Microelectronics vs. Macronix International Co | United Microelectronics vs. Winbond Electronics Corp | United Microelectronics vs. Hon Hai Precision |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |