Correlation Between UMC Electronics and ATRESMEDIA

Can any of the company-specific risk be diversified away by investing in both UMC Electronics and ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA, you can compare the effects of market volatilities on UMC Electronics and ATRESMEDIA 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 ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and ATRESMEDIA.

Diversification Opportunities for UMC Electronics and ATRESMEDIA

0.53

Correlation Coefficient

UMC Electronics  ATRESMEDIA

Very weak diversification

The 3 months correlation between UMC and ATRESMEDIA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA 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 ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of UMC Electronics i.e., UMC Electronics and ATRESMEDIA go up and down completely randomly.

Pair Corralation between UMC Electronics and ATRESMEDIA

Assuming the 90 days horizon UMC Electronics is expected to generate 6.31 times less return on investment than ATRESMEDIA. In addition to that, UMC Electronics is 2.18 times more volatile than ATRESMEDIA. It trades about 0.01 of its total potential returns per unit of risk. ATRESMEDIA is currently generating about 0.13 per unit of volatility. If you would invest  429.00  in ATRESMEDIA on November 29, 2024 and sell it today you would earn a total of  49.00  from holding ATRESMEDIA or generate 11.42% return on investment over 90 days.

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

UMC Electronics Co  vs.  ATRESMEDIA

UMC Electronics

Risk-Adjusted Performance

Weak

Over the last 90 days UMC Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, UMC Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ATRESMEDIA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATRESMEDIA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, ATRESMEDIA may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with UMC Electronics and ATRESMEDIA

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

The idea behind UMC Electronics Co and ATRESMEDIA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.