Correlation Between UMC Electronics and HK Electric
Can any of the company-specific risk be diversified away by investing in both UMC Electronics and HK Electric 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 HK Electric 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 HK Electric Investments, you can compare the effects of market volatilities on UMC Electronics and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and HK Electric.
Diversification Opportunities for UMC Electronics and HK Electric
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UMC and HKT is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of UMC Electronics i.e., UMC Electronics and HK Electric go up and down completely randomly.
Pair Corralation between UMC Electronics and HK Electric
Assuming the 90 days horizon UMC Electronics Co is expected to under-perform the HK Electric. In addition to that, UMC Electronics is 3.08 times more volatile than HK Electric Investments. It trades about -0.15 of its total potential returns per unit of risk. HK Electric Investments is currently generating about 0.0 per unit of volatility. If you would invest 62.00 in HK Electric Investments on September 2, 2024 and sell it today you would earn a total of 0.00 from holding HK Electric Investments or generate 0.0% 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. HK Electric Investments
Performance |
| Timeline |
| UMC Electronics |
| HK Electric Investments |
UMC Electronics and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMC Electronics and HK Electric
The main advantage of trading using opposite UMC Electronics and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMC Electronics position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric'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 |
| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |