Correlation Between Pan Jit and Unimicron Technology

Can any of the company-specific risk be diversified away by investing in both Pan Jit 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 Pan Jit and Unimicron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pan Jit International and Unimicron Technology Corp, you can compare the effects of market volatilities on Pan Jit 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 Pan Jit with a short position of Unimicron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Jit and Unimicron Technology.

Diversification Opportunities for Pan Jit and Unimicron Technology

0.25

Correlation Coefficient

Pan Jit  Unimicron Technology

Modest diversification

The 3 months correlation between Pan and Unimicron is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pan Jit International 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 Pan Jit 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 Pan Jit International 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 Pan Jit i.e., Pan Jit and Unimicron Technology go up and down completely randomly.

Pair Corralation between Pan Jit and Unimicron Technology

Assuming the 90 days trading horizon Pan Jit International is expected to under-perform the Unimicron Technology. But the stock apears to be less risky and, when comparing its historical volatility, Pan Jit International is 1.5 times less risky than Unimicron Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Unimicron Technology Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  14,850  in Unimicron Technology Corp on October 9, 2024 and sell it today you would earn a total of  300.00  from holding Unimicron Technology Corp or generate 2.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pan Jit International  vs.  Unimicron Technology Corp

Pan Jit International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pan Jit International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Unimicron Technology Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Unimicron Technology Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Unimicron Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pan Jit and Unimicron Technology

The main advantage of trading using opposite Pan Jit and Unimicron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Jit 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.

The idea behind Pan Jit International and Unimicron Technology Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.