Correlation Between UMC Electronics and Apple
Can any of the company-specific risk be diversified away by investing in both UMC Electronics and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on UMC Electronics and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and Apple.
Diversification Opportunities for UMC Electronics and Apple
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UMC and Apple is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of UMC Electronics i.e., UMC Electronics and Apple go up and down completely randomly.
Pair Corralation between UMC Electronics and Apple
Assuming the 90 days horizon UMC Electronics Co is expected to under-perform the Apple. In addition to that, UMC Electronics is 1.84 times more volatile than Apple Inc. It trades about -0.06 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.06 per unit of volatility. If you would invest 16,736 in Apple Inc on September 2, 2024 and sell it today you would earn a total of 5,714 from holding Apple Inc or generate 34.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMC Electronics Co vs. Apple Inc
Performance |
| Timeline |
| UMC Electronics |
| Apple Inc |
UMC Electronics and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMC Electronics and Apple
The main advantage of trading using opposite UMC Electronics and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMC Electronics position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| UMC Electronics vs. CHINA TONTINE WINES | UMC Electronics vs. Silicon Motion Technology | UMC Electronics vs. China BlueChemical | UMC Electronics vs. Sanyo Chemical Industries |
| Apple vs. Tsingtao Brewery | Apple vs. AM EAGLE OUTFITTERS | Apple vs. HOCHSCHILD MINING | Apple vs. OURGAME INTHOLDL 00005 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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