Correlation Between Episil Holding and Unimicron Technology

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

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

Diversification Opportunities for Episil Holding and Unimicron Technology

0.51

Correlation Coefficient

Episil Holding  Unimicron Technology

Very weak diversification

The 3 months correlation between Episil and Unimicron is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Episil Holding 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 Episil Holding 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 Episil Holding 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 Episil Holding i.e., Episil Holding and Unimicron Technology go up and down completely randomly.

Pair Corralation between Episil Holding and Unimicron Technology

Assuming the 90 days trading horizon Episil Holding is expected to under-perform the Unimicron Technology. In addition to that, Episil Holding is 1.09 times more volatile than Unimicron Technology Corp. It trades about -0.08 of its total potential returns per unit of risk. Unimicron Technology Corp is currently generating about 0.05 per unit of volatility. If you would invest  14,250  in Unimicron Technology Corp on October 9, 2024 and sell it today you would earn a total of  900.00  from holding Unimicron Technology Corp or generate 6.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Episil Holding  vs.  Unimicron Technology Corp

Episil Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Episil Holding 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 February 2025. The latest fuss may also be a sign of long-term up-swing 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 Episil Holding and Unimicron Technology

The main advantage of trading using opposite Episil Holding and Unimicron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Episil Holding 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 Episil Holding 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.