Correlation Between UMC Electronics and PTT Global
Can any of the company-specific risk be diversified away by investing in both UMC Electronics and PTT Global 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 PTT Global 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 PTT Global Chemical, you can compare the effects of market volatilities on UMC Electronics and PTT Global 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 PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and PTT Global.
Diversification Opportunities for UMC Electronics and PTT Global
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UMC and PTT is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and PTT Global Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Global Chemical 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 PTT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Global Chemical has no effect on the direction of UMC Electronics i.e., UMC Electronics and PTT Global go up and down completely randomly.
Pair Corralation between UMC Electronics and PTT Global
Assuming the 90 days horizon UMC Electronics Co is expected to generate 0.68 times more return on investment than PTT Global. However, UMC Electronics Co is 1.48 times less risky than PTT Global. It trades about -0.01 of its potential returns per unit of risk. PTT Global Chemical is currently generating about -0.04 per unit of risk. If you would invest 212.00 in UMC Electronics Co on September 3, 2024 and sell it today you would lose (23.00) from holding UMC Electronics Co or give up 10.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMC Electronics Co vs. PTT Global Chemical
Performance |
| Timeline |
| UMC Electronics |
| PTT Global Chemical |
UMC Electronics and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMC Electronics and PTT Global
The main advantage of trading using opposite UMC Electronics and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMC Electronics position performs unexpectedly, PTT Global 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 PTT Global will offset losses from the drop in PTT Global's long position.| UMC Electronics vs. ASURE SOFTWARE | UMC Electronics vs. Axway Software SA | UMC Electronics vs. Micron Technology | UMC Electronics vs. AXWAY SOFTWARE EO |
| PTT Global vs. Tianjin Capital Environmental | PTT Global vs. MITSUBISHI STEEL MFG | PTT Global vs. Playtech plc | PTT Global vs. Khiron Life Sciences |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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