Correlation Between Unimicron Technology and Macronix International

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

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

Diversification Opportunities for Unimicron Technology and Macronix International

0.2

Correlation Coefficient

Unimicron Technology  Macronix International

Modest diversification

The 3 months correlation between Unimicron and Macronix is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Unimicron Technology Corp and Macronix International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macronix International and Unimicron 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 Unimicron Technology Corp are associated (or correlated) with Macronix International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macronix International has no effect on the direction of Unimicron Technology i.e., Unimicron Technology and Macronix International go up and down completely randomly.

Pair Corralation between Unimicron Technology and Macronix International

Assuming the 90 days trading horizon Unimicron Technology Corp is expected to under-perform the Macronix International. But the stock apears to be less risky and, when comparing its historical volatility, Unimicron Technology Corp is 1.04 times less risky than Macronix International. The stock trades about -0.15 of its potential returns per unit of risk. The Macronix International Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,020  in Macronix International Co on December 2, 2024 and sell it today you would earn a total of  180.00  from holding Macronix International Co or generate 8.91% return on investment over 90 days.

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

Unimicron Technology Corp  vs.  Macronix International Co

Unimicron Technology Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Unimicron Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Macronix International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Macronix International Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Macronix International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Unimicron Technology and Macronix International

The main advantage of trading using opposite Unimicron Technology and Macronix International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unimicron Technology position performs unexpectedly, Macronix International 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 Macronix International will offset losses from the drop in Macronix International's long position.

The idea behind Unimicron Technology Corp and Macronix International Co 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.