Correlation Between Shin Ruenn and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Shin Ruenn 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 Shin Ruenn and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Ruenn Development and Universal Microelectronics Co, you can compare the effects of market volatilities on Shin Ruenn 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 Shin Ruenn with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Ruenn and Universal Microelectronics.
Diversification Opportunities for Shin Ruenn and Universal Microelectronics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shin and Universal is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shin Ruenn Development and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and Shin Ruenn 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 Shin Ruenn Development 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 Shin Ruenn i.e., Shin Ruenn and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Shin Ruenn and Universal Microelectronics
Assuming the 90 days trading horizon Shin Ruenn Development is expected to generate 0.7 times more return on investment than Universal Microelectronics. However, Shin Ruenn Development is 1.43 times less risky than Universal Microelectronics. It trades about 0.14 of its potential returns per unit of risk. Universal Microelectronics Co is currently generating about -0.03 per unit of risk. If you would invest 5,930 in Shin Ruenn Development on August 30, 2024 and sell it today you would earn a total of 470.00 from holding Shin Ruenn Development or generate 7.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shin Ruenn Development vs. Universal Microelectronics Co
Performance |
| Timeline |
| Shin Ruenn Development |
| Universal Microelectronics |
Shin Ruenn and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Ruenn and Universal Microelectronics
The main advantage of trading using opposite Shin Ruenn and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Ruenn 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.| Shin Ruenn vs. Thermaltake Technology Co | Shin Ruenn vs. HIM International Music | Shin Ruenn vs. Mercuries Life Insurance | Shin Ruenn vs. Hunya Foods 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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