Correlation Between United Microelectronics and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Amkor Technology 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 United Microelectronics and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Amkor Technology, you can compare the effects of market volatilities on United Microelectronics and Amkor Technology 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 United Microelectronics with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Amkor Technology.
Diversification Opportunities for United Microelectronics and Amkor Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Amkor is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and United Microelectronics 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 United Microelectronics are associated (or correlated) with Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of United Microelectronics i.e., United Microelectronics and Amkor Technology go up and down completely randomly.
Pair Corralation between United Microelectronics and Amkor Technology
Considering the 90-day investment horizon United Microelectronics is expected to under-perform the Amkor Technology. But the stock apears to be less risky and, when comparing its historical volatility, United Microelectronics is 1.25 times less risky than Amkor Technology. The stock trades about -0.22 of its potential returns per unit of risk. The Amkor Technology is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 2,985 in Amkor Technology on October 24, 2024 and sell it today you would lose (394.00) from holding Amkor Technology or give up 13.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Amkor Technology
Performance |
| Timeline |
| United Microelectronics |
| Amkor Technology |
United Microelectronics and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Amkor Technology
The main advantage of trading using opposite United Microelectronics and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Amkor Technology 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 Amkor Technology will offset losses from the drop in Amkor Technology's long position.| United Microelectronics vs. Silicon Motion Technology | United Microelectronics vs. ASE Industrial Holding | United Microelectronics vs. ChipMOS Technologies | United Microelectronics vs. SemiLEDS |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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