Correlation Between United Microelectronics and Allient

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

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

Diversification Opportunities for United Microelectronics and Allient

-0.81

Correlation Coefficient

United Microelectronics  Allient

Pay attention - limited upside

The 3 months correlation between United and Allient is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding United Microelectronics and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and United Microelectronics 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 United Microelectronics are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of United Microelectronics i.e., United Microelectronics and Allient go up and down completely randomly.

Pair Corralation between United Microelectronics and Allient

Considering the 90-day investment horizon United Microelectronics is expected to generate 0.67 times more return on investment than Allient. However, United Microelectronics is 1.5 times less risky than Allient. It trades about 0.0 of its potential returns per unit of risk. Allient is currently generating about -0.01 per unit of risk. If you would invest  733.00  in United Microelectronics on October 5, 2024 and sell it today you would lose (80.00) from holding United Microelectronics or give up 10.91% of portfolio value over 90 days.

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

United Microelectronics  vs.  Allient

United Microelectronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Microelectronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Allient

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Microelectronics and Allient

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

The idea behind United Microelectronics and Allient 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..