Correlation Between ROMERIKE SPAREBANK and UMC Electronics
Can any of the company-specific risk be diversified away by investing in both ROMERIKE SPAREBANK and UMC Electronics 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 ROMERIKE SPAREBANK and UMC Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ROMERIKE SPAREBANK NK and UMC Electronics Co, you can compare the effects of market volatilities on ROMERIKE SPAREBANK and UMC Electronics 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 ROMERIKE SPAREBANK with a short position of UMC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROMERIKE SPAREBANK and UMC Electronics.
Diversification Opportunities for ROMERIKE SPAREBANK and UMC Electronics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ROMERIKE and UMC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ROMERIKE SPAREBANK NK and UMC Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMC Electronics and ROMERIKE SPAREBANK 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 ROMERIKE SPAREBANK NK are associated (or correlated) with UMC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMC Electronics has no effect on the direction of ROMERIKE SPAREBANK i.e., ROMERIKE SPAREBANK and UMC Electronics go up and down completely randomly.
Pair Corralation between ROMERIKE SPAREBANK and UMC Electronics
Assuming the 90 days horizon ROMERIKE SPAREBANK NK is expected to generate 0.44 times more return on investment than UMC Electronics. However, ROMERIKE SPAREBANK NK is 2.27 times less risky than UMC Electronics. It trades about 0.26 of its potential returns per unit of risk. UMC Electronics Co is currently generating about -0.15 per unit of risk. If you would invest 1,013 in ROMERIKE SPAREBANK NK on August 29, 2024 and sell it today you would earn a total of 58.00 from holding ROMERIKE SPAREBANK NK or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ROMERIKE SPAREBANK NK vs. UMC Electronics Co
Performance |
| Timeline |
| ROMERIKE SPAREBANK |
| UMC Electronics |
ROMERIKE SPAREBANK and UMC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROMERIKE SPAREBANK and UMC Electronics
The main advantage of trading using opposite ROMERIKE SPAREBANK and UMC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROMERIKE SPAREBANK position performs unexpectedly, UMC Electronics 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 UMC Electronics will offset losses from the drop in UMC Electronics' long position.| ROMERIKE SPAREBANK vs. UMC Electronics Co | ROMERIKE SPAREBANK vs. Magnachip Semiconductor | ROMERIKE SPAREBANK vs. ELMOS SEMICONDUCTOR | ROMERIKE SPAREBANK vs. STORE ELECTRONIC |
| UMC Electronics vs. Hon Hai Precision | UMC Electronics vs. Corning Incorporated | UMC Electronics vs. Sunny Optical Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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