Correlation Between Amtran Technology and Universal Microelectronics
Can any of the company-specific risk be diversified away by investing in both Amtran Technology and Universal Microelectronics 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 Amtran Technology and Universal Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amtran Technology Co and Universal Microelectronics Co, you can compare the effects of market volatilities on Amtran Technology and Universal Microelectronics 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 Amtran Technology with a short position of Universal Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amtran Technology and Universal Microelectronics.
Diversification Opportunities for Amtran Technology and Universal Microelectronics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amtran and Universal is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Amtran Technology Co and Universal Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Microelectronics and Amtran Technology 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 Amtran Technology Co are associated (or correlated) with Universal Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Microelectronics has no effect on the direction of Amtran Technology i.e., Amtran Technology and Universal Microelectronics go up and down completely randomly.
Pair Corralation between Amtran Technology and Universal Microelectronics
Assuming the 90 days trading horizon Amtran Technology Co is expected to generate 0.49 times more return on investment than Universal Microelectronics. However, Amtran Technology Co is 2.06 times less risky than Universal Microelectronics. It trades about -0.22 of its potential returns per unit of risk. Universal Microelectronics Co is currently generating about -0.24 per unit of risk. If you would invest 2,050 in Amtran Technology Co on September 25, 2024 and sell it today you would lose (135.00) from holding Amtran Technology Co or give up 6.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Amtran Technology Co vs. Universal Microelectronics Co
Performance |
Timeline |
Amtran Technology |
Universal Microelectronics |
Amtran Technology and Universal Microelectronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amtran Technology and Universal Microelectronics
The main advantage of trading using opposite Amtran Technology and Universal Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amtran Technology position performs unexpectedly, Universal Microelectronics 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 Universal Microelectronics will offset losses from the drop in Universal Microelectronics' long position.Amtran Technology vs. Johnson Health Tech | Amtran Technology vs. Chung Lien Transportation | Amtran Technology vs. RiTdisplay Corp | Amtran Technology vs. Hannstar Display Corp |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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