Correlation Between Universal Electronics and Phihong Technology
Can any of the company-specific risk be diversified away by investing in both Universal Electronics and Phihong 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 Universal Electronics and Phihong Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Electronics and Phihong Technology Co, you can compare the effects of market volatilities on Universal Electronics and Phihong 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 Universal Electronics with a short position of Phihong Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Electronics and Phihong Technology.
Diversification Opportunities for Universal Electronics and Phihong Technology
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Universal and Phihong is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Universal Electronics and Phihong Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phihong Technology and Universal Electronics 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 Universal Electronics are associated (or correlated) with Phihong Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phihong Technology has no effect on the direction of Universal Electronics i.e., Universal Electronics and Phihong Technology go up and down completely randomly.
Pair Corralation between Universal Electronics and Phihong Technology
Given the investment horizon of 90 days Universal Electronics is expected to generate 1.59 times more return on investment than Phihong Technology. However, Universal Electronics is 1.59 times more volatile than Phihong Technology Co. It trades about 0.28 of its potential returns per unit of risk. Phihong Technology Co is currently generating about -0.07 per unit of risk. If you would invest 1,010 in Universal Electronics on February 7, 2024 and sell it today you would earn a total of 246.00 from holding Universal Electronics or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Universal Electronics vs. Phihong Technology Co
Performance |
| Timeline |
| Universal Electronics |
| Phihong Technology |
Universal Electronics and Phihong Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Electronics and Phihong Technology
The main advantage of trading using opposite Universal Electronics and Phihong Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Electronics position performs unexpectedly, Phihong 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 Phihong Technology will offset losses from the drop in Phihong Technology's long position.| Universal Electronics vs. LG Display Co | Universal Electronics vs. Vizio Holding Corp | Universal Electronics vs. Zepp Health Corp | Universal Electronics vs. Sonos Inc |
| Phihong Technology vs. Ichia Technologies | Phihong Technology vs. Elan Microelectronics Corp | Phihong Technology vs. Amtran Technology Co | Phihong Technology vs. Sunplus Technology Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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