Correlation Between UMC Electronics and ATRESMEDIA
Can any of the company-specific risk be diversified away by investing in both UMC Electronics and ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA, you can compare the effects of market volatilities on UMC Electronics and ATRESMEDIA 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 ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and ATRESMEDIA.
Diversification Opportunities for UMC Electronics and ATRESMEDIA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UMC and ATRESMEDIA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA 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 ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of UMC Electronics i.e., UMC Electronics and ATRESMEDIA go up and down completely randomly.
Pair Corralation between UMC Electronics and ATRESMEDIA
Assuming the 90 days horizon UMC Electronics Co is expected to under-perform the ATRESMEDIA. In addition to that, UMC Electronics is 3.14 times more volatile than ATRESMEDIA. It trades about -0.2 of its total potential returns per unit of risk. ATRESMEDIA is currently generating about 0.34 per unit of volatility. If you would invest 434.00 in ATRESMEDIA on August 31, 2024 and sell it today you would earn a total of 22.00 from holding ATRESMEDIA or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UMC Electronics Co vs. ATRESMEDIA
Performance |
| Timeline |
| UMC Electronics |
| ATRESMEDIA |
UMC Electronics and ATRESMEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UMC Electronics and ATRESMEDIA
The main advantage of trading using opposite UMC Electronics and ATRESMEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMC Electronics position performs unexpectedly, ATRESMEDIA 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 ATRESMEDIA will offset losses from the drop in ATRESMEDIA's long position.| UMC Electronics vs. Samsung SDI Co | UMC Electronics vs. Murata Manufacturing Co | UMC Electronics vs. Corning Incorporated | UMC Electronics vs. TDK Corporation |
| ATRESMEDIA vs. REGAL ASIAN INVESTMENTS | ATRESMEDIA vs. 24SEVENOFFICE GROUP AB | ATRESMEDIA vs. MTI WIRELESS EDGE | ATRESMEDIA vs. AM EAGLE OUTFITTERS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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