Correlation Between UMC Electronics and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both UMC Electronics and Haverty Furniture 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 UMC Electronics and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UMC Electronics Co and Haverty Furniture Companies, you can compare the effects of market volatilities on UMC Electronics and Haverty Furniture 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 UMC Electronics with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and Haverty Furniture.
Diversification Opportunities for UMC Electronics and Haverty Furniture
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between UMC and Haverty is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and UMC Electronics 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 UMC Electronics Co are associated (or correlated) with Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of UMC Electronics i.e., UMC Electronics and Haverty Furniture go up and down completely randomly.
Pair Corralation between UMC Electronics and Haverty Furniture
Assuming the 90 days horizon UMC Electronics Co is expected to generate 1.19 times more return on investment than Haverty Furniture. However, UMC Electronics is 1.19 times more volatile than Haverty Furniture Companies. It trades about 0.07 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.01 per unit of risk. If you would invest 183.00 in UMC Electronics Co on November 28, 2024 and sell it today you would earn a total of 8.00 from holding UMC Electronics Co or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
UMC Electronics Co vs. Haverty Furniture Companies
Performance |
| Timeline |
| UMC Electronics |
| Haverty Furniture |
UMC Electronics and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMC Electronics and Haverty Furniture
The main advantage of trading using opposite UMC Electronics and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMC Electronics position performs unexpectedly, Haverty Furniture 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.| UMC Electronics vs. Ultra Clean Holdings | UMC Electronics vs. Hastings Technology Metals | UMC Electronics vs. ULTRA CLEAN HLDGS | UMC Electronics vs. SMA Solar Technology |
| Haverty Furniture vs. CVR Medical Corp | Haverty Furniture vs. Semiconductor Manufacturing International | Haverty Furniture vs. Apyx Medical Corp | Haverty Furniture vs. Japan Medical Dynamic |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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