Correlation Between UMC Electronics and Airbus SE
Can any of the company-specific risk be diversified away by investing in both UMC Electronics and Airbus SE 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 Airbus SE 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 Airbus SE, you can compare the effects of market volatilities on UMC Electronics and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and Airbus SE.
Diversification Opportunities for UMC Electronics and Airbus SE
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UMC and Airbus is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of UMC Electronics i.e., UMC Electronics and Airbus SE go up and down completely randomly.
Pair Corralation between UMC Electronics and Airbus SE
Assuming the 90 days horizon UMC Electronics Co is expected to under-perform the Airbus SE. In addition to that, UMC Electronics is 1.06 times more volatile than Airbus SE. It trades about -0.02 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.14 per unit of volatility. If you would invest 3,920 in Airbus SE on November 6, 2024 and sell it today you would earn a total of 200.00 from holding Airbus SE or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMC Electronics Co vs. Airbus SE
Performance |
| Timeline |
| UMC Electronics |
| Airbus SE |
UMC Electronics and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMC Electronics and Airbus SE
The main advantage of trading using opposite UMC Electronics and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMC Electronics position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| UMC Electronics vs. ARDAGH METAL PACDL 0001 | UMC Electronics vs. BlueScope Steel Limited | UMC Electronics vs. MAANSHAN IRON H | UMC Electronics vs. ANGANG STEEL H |
| Airbus SE vs. MOVIE GAMES SA | Airbus SE vs. TRAVEL LEISURE DL 01 | Airbus SE vs. GameStop Corp | Airbus SE vs. LG Display 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |