Correlation Between United Microelectronics and Himax Technologies
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Himax Technologies 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 Himax Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Himax Technologies, you can compare the effects of market volatilities on United Microelectronics and Himax Technologies 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 Himax Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Himax Technologies.
Diversification Opportunities for United Microelectronics and Himax Technologies
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Himax is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Himax Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Himax Technologies 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 Himax Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Himax Technologies has no effect on the direction of United Microelectronics i.e., United Microelectronics and Himax Technologies go up and down completely randomly.
Pair Corralation between United Microelectronics and Himax Technologies
Considering the 90-day investment horizon United Microelectronics is expected to under-perform the Himax Technologies. But the stock apears to be less risky and, when comparing its historical volatility, United Microelectronics is 1.96 times less risky than Himax Technologies. The stock trades about -0.01 of its potential returns per unit of risk. The Himax Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 707.00 in Himax Technologies on November 2, 2024 and sell it today you would earn a total of 307.00 from holding Himax Technologies or generate 43.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
United Microelectronics vs. Himax Technologies
Performance |
| Timeline |
| United Microelectronics |
| Himax Technologies |
United Microelectronics and Himax Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Himax Technologies
The main advantage of trading using opposite United Microelectronics and Himax Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Himax Technologies 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 Himax Technologies will offset losses from the drop in Himax Technologies' long position.| United Microelectronics vs. ProShares Russell Dividend | United Microelectronics vs. United Rentals | United Microelectronics vs. Kforce Inc | United Microelectronics vs. The Ensign Group |
| Himax Technologies vs. ASE Industrial Holding | Himax Technologies vs. United Microelectronics | Himax Technologies vs. MaxLinear | Himax Technologies vs. SemiLEDS |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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