Correlation Between Global Unichip and Unimicron Technology
Can any of the company-specific risk be diversified away by investing in both Global Unichip and Unimicron 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 Global Unichip and Unimicron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Unichip Corp and Unimicron Technology Corp, you can compare the effects of market volatilities on Global Unichip and Unimicron 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 Global Unichip with a short position of Unimicron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Unichip and Unimicron Technology.
Diversification Opportunities for Global Unichip and Unimicron Technology
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Unimicron is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global Unichip Corp and Unimicron Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unimicron Technology Corp and Global Unichip 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 Global Unichip Corp are associated (or correlated) with Unimicron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unimicron Technology Corp has no effect on the direction of Global Unichip i.e., Global Unichip and Unimicron Technology go up and down completely randomly.
Pair Corralation between Global Unichip and Unimicron Technology
Assuming the 90 days trading horizon Global Unichip Corp is expected to generate 1.25 times more return on investment than Unimicron Technology. However, Global Unichip is 1.25 times more volatile than Unimicron Technology Corp. It trades about 0.07 of its potential returns per unit of risk. Unimicron Technology Corp is currently generating about 0.01 per unit of risk. If you would invest 55,406 in Global Unichip Corp on February 10, 2024 and sell it today you would earn a total of 72,094 from holding Global Unichip Corp or generate 130.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Global Unichip Corp vs. Unimicron Technology Corp
Performance |
Timeline |
Global Unichip Corp |
Unimicron Technology Corp |
Global Unichip and Unimicron Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global Unichip and Unimicron Technology
The main advantage of trading using opposite Global Unichip and Unimicron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Unichip position performs unexpectedly, Unimicron 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 Unimicron Technology will offset losses from the drop in Unimicron Technology's long position.Global Unichip vs. Alchip Technologies | Global Unichip vs. Realtek Semiconductor Corp | Global Unichip vs. Faraday Technology Corp | Global Unichip vs. Novatek Microelectronics Corp |
Unimicron Technology vs. Nan Ya Printed | Unimicron Technology vs. Kinsus Interconnect Technology | Unimicron Technology vs. Novatek Microelectronics Corp | Unimicron Technology vs. LARGAN Precision 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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