Correlation Between Yeou Yih and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Yeou Yih 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 Yeou Yih and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yeou Yih Steel and Universal Microelectronics Co, you can compare the effects of market volatilities on Yeou Yih 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 Yeou Yih with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yeou Yih and Universal Microelectronics.
Diversification Opportunities for Yeou Yih and Universal Microelectronics
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yeou and Universal is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Yeou Yih Steel and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and Yeou Yih 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 Yeou Yih Steel 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 Yeou Yih i.e., Yeou Yih and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Yeou Yih and Universal Microelectronics
Assuming the 90 days trading horizon Yeou Yih Steel is expected to generate 2.12 times more return on investment than Universal Microelectronics. However, Yeou Yih is 2.12 times more volatile than Universal Microelectronics Co. It trades about 0.28 of its potential returns per unit of risk. Universal Microelectronics Co is currently generating about 0.28 per unit of risk. If you would invest 1,415 in Yeou Yih Steel on November 28, 2024 and sell it today you would earn a total of 205.00 from holding Yeou Yih Steel or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yeou Yih Steel vs. Universal Microelectronics Co
Performance |
| Timeline |
| Yeou Yih Steel |
| Universal Microelectronics |
Yeou Yih and Universal Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yeou Yih and Universal Microelectronics
The main advantage of trading using opposite Yeou Yih and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yeou Yih 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.| Yeou Yih vs. Song Ho Industrial | Yeou Yih vs. Wha Yu Industrial | Yeou Yih vs. De Licacy Industrial | Yeou Yih vs. Data International 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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