Correlation Between UMC Electronics and Marie Brizard

Can any of the company-specific risk be diversified away by investing in both UMC Electronics and Marie Brizard 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 UMC Electronics and Marie Brizard into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UMC Electronics Co and Marie Brizard Wine, you can compare the effects of market volatilities on UMC Electronics and Marie Brizard 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 UMC Electronics with a short position of Marie Brizard. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and Marie Brizard.

Diversification Opportunities for UMC Electronics and Marie Brizard

0.01

Correlation Coefficient

UMC Electronics  Marie Brizard

Significant diversification

The 3 months correlation between UMC and Marie is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine and UMC Electronics 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 UMC Electronics Co are associated (or correlated) with Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of UMC Electronics i.e., UMC Electronics and Marie Brizard go up and down completely randomly.

Pair Corralation between UMC Electronics and Marie Brizard

Assuming the 90 days horizon UMC Electronics Co is expected to under-perform the Marie Brizard. In addition to that, UMC Electronics is 1.16 times more volatile than Marie Brizard Wine. It trades about -0.01 of its total potential returns per unit of risk. Marie Brizard Wine is currently generating about 0.02 per unit of volatility. If you would invest  378.00  in Marie Brizard Wine on September 5, 2024 and sell it today you would earn a total of  6.00  from holding Marie Brizard Wine or generate 1.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.85%
Values	Daily Returns

UMC Electronics Co  vs.  Marie Brizard Wine

UMC Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UMC Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marie Brizard Wine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Marie Brizard is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with UMC Electronics and Marie Brizard

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

The idea behind UMC Electronics Co and Marie Brizard Wine 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.