Correlation Between UMC Electronics and Chuangs China
Can any of the company-specific risk be diversified away by investing in both UMC Electronics and Chuangs China 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 Chuangs China 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 Chuangs China Investments, you can compare the effects of market volatilities on UMC Electronics and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and Chuangs China.
Diversification Opportunities for UMC Electronics and Chuangs China
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UMC and Chuangs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of UMC Electronics i.e., UMC Electronics and Chuangs China go up and down completely randomly.
Pair Corralation between UMC Electronics and Chuangs China
Assuming the 90 days horizon UMC Electronics Co is expected to under-perform the Chuangs China. But the stock apears to be less risky and, when comparing its historical volatility, UMC Electronics Co is 1.98 times less risky than Chuangs China. The stock trades about -0.02 of its potential returns per unit of risk. The Chuangs China Investments is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1.30 in Chuangs China Investments on November 28, 2024 and sell it today you would lose (0.30) from holding Chuangs China Investments or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMC Electronics Co vs. Chuangs China Investments
Performance |
| Timeline |
| UMC Electronics |
| Chuangs China Investments |
UMC Electronics and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMC Electronics and Chuangs China
The main advantage of trading using opposite UMC Electronics and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMC Electronics position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| UMC Electronics vs. MARKET VECTR RETAIL | UMC Electronics vs. FLOW TRADERS LTD | UMC Electronics vs. Tradeweb Markets | UMC Electronics vs. Indutrade AB |
| Chuangs China vs. Daito Trust Construction | Chuangs China vs. Hanison Construction Holdings | Chuangs China vs. Penta Ocean Construction Co | Chuangs China vs. Corsair Gaming |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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