Correlation Between United Microelectronics and GSI Technology
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and GSI 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 GSI 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 GSI Technology, you can compare the effects of market volatilities on United Microelectronics and GSI 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 GSI Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and GSI Technology.
Diversification Opportunities for United Microelectronics and GSI Technology
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and GSI is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and GSI Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSI 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 GSI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSI Technology has no effect on the direction of United Microelectronics i.e., United Microelectronics and GSI Technology go up and down completely randomly.
Pair Corralation between United Microelectronics and GSI Technology
Considering the 90-day investment horizon United Microelectronics is expected to generate 12.29 times less return on investment than GSI Technology. But when comparing it to its historical volatility, United Microelectronics is 3.41 times less risky than GSI Technology. It trades about 0.0 of its potential returns per unit of risk. GSI Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 602.00 in GSI Technology on August 28, 2024 and sell it today you would lose (292.00) from holding GSI Technology or give up 48.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. GSI Technology
Performance |
| Timeline |
| United Microelectronics |
| GSI Technology |
United Microelectronics and GSI Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and GSI Technology
The main advantage of trading using opposite United Microelectronics and GSI Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, GSI 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 GSI Technology will offset losses from the drop in GSI Technology's long position.The idea behind United Microelectronics and GSI Technology 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.| GSI Technology vs. SEALSQ Corp | GSI Technology vs. Nano Labs | GSI Technology vs. SemiLEDS | GSI Technology vs. Wisekey International Holding |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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