Correlation Between United Microelectronics and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and SBM Offshore 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 SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and SBM Offshore NV, you can compare the effects of market volatilities on United Microelectronics and SBM Offshore 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 SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and SBM Offshore.
Diversification Opportunities for United Microelectronics and SBM Offshore
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and SBM is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV 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 SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of United Microelectronics i.e., United Microelectronics and SBM Offshore go up and down completely randomly.
Pair Corralation between United Microelectronics and SBM Offshore
Considering the 90-day investment horizon United Microelectronics is expected to under-perform the SBM Offshore. But the stock apears to be less risky and, when comparing its historical volatility, United Microelectronics is 1.01 times less risky than SBM Offshore. The stock trades about -0.22 of its potential returns per unit of risk. The SBM Offshore NV is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,801 in SBM Offshore NV on October 24, 2024 and sell it today you would lose (58.00) from holding SBM Offshore NV or give up 3.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. SBM Offshore NV
Performance |
| Timeline |
| United Microelectronics |
| SBM Offshore NV |
United Microelectronics and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and SBM Offshore
The main advantage of trading using opposite United Microelectronics and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, SBM Offshore 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 SBM Offshore will offset losses from the drop in SBM Offshore's long position.| United Microelectronics vs. Silicon Motion Technology | United Microelectronics vs. ASE Industrial Holding | United Microelectronics vs. ChipMOS Technologies | United Microelectronics vs. SemiLEDS |
| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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