Correlation Between PUBLIC STORAGE and UMC Electronics
Can any of the company-specific risk be diversified away by investing in both PUBLIC STORAGE 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 PUBLIC STORAGE and UMC Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PUBLIC STORAGE PRFO and UMC Electronics Co, you can compare the effects of market volatilities on PUBLIC STORAGE 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 PUBLIC STORAGE with a short position of UMC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUBLIC STORAGE and UMC Electronics.
Diversification Opportunities for PUBLIC STORAGE and UMC Electronics
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PUBLIC and UMC is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding PUBLIC STORAGE PRFO and UMC Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMC Electronics and PUBLIC STORAGE 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 PUBLIC STORAGE PRFO 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 PUBLIC STORAGE i.e., PUBLIC STORAGE and UMC Electronics go up and down completely randomly.
Pair Corralation between PUBLIC STORAGE and UMC Electronics
Assuming the 90 days trading horizon PUBLIC STORAGE PRFO is expected to generate 0.38 times more return on investment than UMC Electronics. However, PUBLIC STORAGE PRFO is 2.6 times less risky than UMC Electronics. It trades about 0.04 of its potential returns per unit of risk. UMC Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 1,397 in PUBLIC STORAGE PRFO on September 13, 2024 and sell it today you would earn a total of 233.00 from holding PUBLIC STORAGE PRFO or generate 16.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PUBLIC STORAGE PRFO vs. UMC Electronics Co
Performance |
| Timeline |
| PUBLIC STORAGE PRFO |
| UMC Electronics |
PUBLIC STORAGE and UMC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PUBLIC STORAGE and UMC Electronics
The main advantage of trading using opposite PUBLIC STORAGE and UMC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PUBLIC STORAGE 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.| PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. SIVERS SEMICONDUCTORS AB |
| UMC Electronics vs. Sunny Optical Technology | UMC Electronics vs. Hubbell Incorporated | UMC Electronics vs. TDK Corporation | UMC Electronics vs. Superior Plus Corp |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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