Correlation Between United Microelectronics and AMREP
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and AMREP 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 AMREP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and AMREP, you can compare the effects of market volatilities on United Microelectronics and AMREP 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 AMREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and AMREP.
Diversification Opportunities for United Microelectronics and AMREP
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and AMREP is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP 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 AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of United Microelectronics i.e., United Microelectronics and AMREP go up and down completely randomly.
Pair Corralation between United Microelectronics and AMREP
Considering the 90-day investment horizon United Microelectronics is expected to under-perform the AMREP. But the stock apears to be less risky and, when comparing its historical volatility, United Microelectronics is 1.62 times less risky than AMREP. The stock trades about 0.0 of its potential returns per unit of risk. The AMREP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,314 in AMREP on December 6, 2024 and sell it today you would earn a total of 1,008 from holding AMREP or generate 76.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. AMREP
Performance |
| Timeline |
| United Microelectronics |
| AMREP |
United Microelectronics and AMREP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and AMREP
The main advantage of trading using opposite United Microelectronics and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP'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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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