Correlation Between Radiant Opto and Unimicron Technology
Can any of the company-specific risk be diversified away by investing in both Radiant Opto and Unimicron Technology 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 Radiant Opto and Unimicron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radiant Opto Electronics Corp and Unimicron Technology Corp, you can compare the effects of market volatilities on Radiant Opto and Unimicron Technology 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 Radiant Opto with a short position of Unimicron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Opto and Unimicron Technology.
Diversification Opportunities for Radiant Opto and Unimicron Technology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Radiant and Unimicron is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Opto Electronics Corp and Unimicron Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unimicron Technology Corp and Radiant Opto 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 Radiant Opto Electronics Corp are associated (or correlated) with Unimicron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unimicron Technology Corp has no effect on the direction of Radiant Opto i.e., Radiant Opto and Unimicron Technology go up and down completely randomly.
Pair Corralation between Radiant Opto and Unimicron Technology
Assuming the 90 days trading horizon Radiant Opto Electronics Corp is expected to generate 0.53 times more return on investment than Unimicron Technology. However, Radiant Opto Electronics Corp is 1.87 times less risky than Unimicron Technology. It trades about 0.01 of its potential returns per unit of risk. Unimicron Technology Corp is currently generating about -0.13 per unit of risk. If you would invest 19,850 in Radiant Opto Electronics Corp on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Radiant Opto Electronics Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Radiant Opto Electronics Corp vs. Unimicron Technology Corp
Performance |
| Timeline |
| Radiant Opto Electro |
| Unimicron Technology Corp |
Radiant Opto and Unimicron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radiant Opto and Unimicron Technology
The main advantage of trading using opposite Radiant Opto and Unimicron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radiant Opto position performs unexpectedly, Unimicron Technology 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 Unimicron Technology will offset losses from the drop in Unimicron Technology's long position.| Radiant Opto vs. Powertech Technology | Radiant Opto vs. Catcher Technology Co | Radiant Opto vs. Novatek Microelectronics Corp | Radiant Opto vs. Wistron Corp |
| Unimicron Technology vs. Nan Ya Printed | Unimicron Technology vs. Kinsus Interconnect Technology | Unimicron Technology vs. Novatek Microelectronics Corp | Unimicron Technology vs. LARGAN Precision Co |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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