Correlation Between Phihong Technology and Universal Electronics
Can any of the company-specific risk be diversified away by investing in both Phihong Technology and Universal Electronics 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 Phihong Technology and Universal Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phihong Technology Co and Universal Electronics, you can compare the effects of market volatilities on Phihong Technology and Universal Electronics 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 Phihong Technology with a short position of Universal Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phihong Technology and Universal Electronics.
Diversification Opportunities for Phihong Technology and Universal Electronics
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Phihong and Universal is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Phihong Technology Co and Universal Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Electronics and Phihong 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 Phihong Technology Co are associated (or correlated) with Universal Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Electronics has no effect on the direction of Phihong Technology i.e., Phihong Technology and Universal Electronics go up and down completely randomly.
Pair Corralation between Phihong Technology and Universal Electronics
Assuming the 90 days trading horizon Phihong Technology Co is expected to under-perform the Universal Electronics. In addition to that, Phihong Technology is 1.11 times more volatile than Universal Electronics. It trades about -0.04 of its total potential returns per unit of risk. Universal Electronics is currently generating about 0.01 per unit of volatility. If you would invest 1,006 in Universal Electronics on January 21, 2024 and sell it today you would earn a total of 2.00 from holding Universal Electronics or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Phihong Technology Co vs. Universal Electronics
Performance |
| Timeline |
| Phihong Technology |
| Universal Electronics |
Phihong Technology and Universal Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phihong Technology and Universal Electronics
The main advantage of trading using opposite Phihong Technology and Universal Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phihong Technology position performs unexpectedly, Universal Electronics 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 Universal Electronics will offset losses from the drop in Universal Electronics' long position.The idea behind Phihong Technology Co and Universal Electronics 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.| Universal Electronics vs. LG Display Co | Universal Electronics vs. The Singing Machine | Universal Electronics vs. Wearable Devices | Universal Electronics vs. Zepp Health Corp |
Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |