Correlation Between United Microelectronics and Celestica
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Celestica 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 Celestica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Celestica, you can compare the effects of market volatilities on United Microelectronics and Celestica 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 Celestica. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Celestica.
Diversification Opportunities for United Microelectronics and Celestica
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Celestica is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica 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 Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of United Microelectronics i.e., United Microelectronics and Celestica go up and down completely randomly.
Pair Corralation between United Microelectronics and Celestica
Considering the 90-day investment horizon United Microelectronics is expected to under-perform the Celestica. But the stock apears to be less risky and, when comparing its historical volatility, United Microelectronics is 2.56 times less risky than Celestica. The stock trades about -0.31 of its potential returns per unit of risk. The Celestica is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 8,397 in Celestica on September 19, 2024 and sell it today you would earn a total of 1,384 from holding Celestica or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Celestica
Performance |
| Timeline |
| United Microelectronics |
| Celestica |
United Microelectronics and Celestica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Celestica
The main advantage of trading using opposite United Microelectronics and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Celestica 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 Celestica will offset losses from the drop in Celestica's long position.The idea behind United Microelectronics and Celestica pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Celestica vs. IONQ Inc | Celestica vs. Quantum | Celestica vs. Super Micro Computer | Celestica vs. Red Cat Holdings |
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
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |