Correlation Between UMC Electronics and Air Transport
Can any of the company-specific risk be diversified away by investing in both UMC Electronics and Air Transport 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 Air Transport 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 Air Transport Services, you can compare the effects of market volatilities on UMC Electronics and Air Transport 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 Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and Air Transport.
Diversification Opportunities for UMC Electronics and Air Transport
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UMC and Air is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of UMC Electronics i.e., UMC Electronics and Air Transport go up and down completely randomly.
Pair Corralation between UMC Electronics and Air Transport
Assuming the 90 days horizon UMC Electronics Co is expected to under-perform the Air Transport. But the stock apears to be less risky and, when comparing its historical volatility, UMC Electronics Co is 2.49 times less risky than Air Transport. The stock trades about -0.17 of its potential returns per unit of risk. The Air Transport Services is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,580 in Air Transport Services on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Air Transport Services or generate 31.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMC Electronics Co vs. Air Transport Services
Performance |
| Timeline |
| UMC Electronics |
| Air Transport Services |
UMC Electronics and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMC Electronics and Air Transport
The main advantage of trading using opposite UMC Electronics and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMC Electronics position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| UMC Electronics vs. Perdoceo Education | UMC Electronics vs. IDP EDUCATION LTD | UMC Electronics vs. Boiron SA | UMC Electronics vs. Khiron Life Sciences |
| Air Transport vs. Digilife Technologies Limited | Air Transport vs. COMBA TELECOM SYST | Air Transport vs. Singapore Telecommunications Limited | Air Transport vs. Chunghwa Telecom 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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