Correlation Between United Microelectronics and Silicon Gaming
Can any of the company-specific risk be diversified away by investing in both United Microelectronics and Silicon Gaming 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 Silicon Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Microelectronics and Silicon Gaming, you can compare the effects of market volatilities on United Microelectronics and Silicon Gaming 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 Silicon Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Microelectronics and Silicon Gaming.
Diversification Opportunities for United Microelectronics and Silicon Gaming
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Silicon is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Silicon Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Gaming 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 Silicon Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Gaming has no effect on the direction of United Microelectronics i.e., United Microelectronics and Silicon Gaming go up and down completely randomly.
Pair Corralation between United Microelectronics and Silicon Gaming
Considering the 90-day investment horizon United Microelectronics is expected to under-perform the Silicon Gaming. But the stock apears to be less risky and, when comparing its historical volatility, United Microelectronics is 1.4 times less risky than Silicon Gaming. The stock trades about -0.12 of its potential returns per unit of risk. The Silicon Gaming is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Silicon Gaming on November 9, 2024 and sell it today you would earn a total of 1.00 from holding Silicon Gaming or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Microelectronics vs. Silicon Gaming
Performance |
| Timeline |
| United Microelectronics |
| Silicon Gaming |
United Microelectronics and Silicon Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Microelectronics and Silicon Gaming
The main advantage of trading using opposite United Microelectronics and Silicon Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Microelectronics position performs unexpectedly, Silicon Gaming 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 Silicon Gaming will offset losses from the drop in Silicon Gaming'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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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