Correlation Between UMC Electronics and Benchmark Electronics
Can any of the company-specific risk be diversified away by investing in both UMC Electronics and Benchmark 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 UMC Electronics and Benchmark Electronics 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 Benchmark Electronics, you can compare the effects of market volatilities on UMC Electronics and Benchmark 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 UMC Electronics with a short position of Benchmark Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of UMC Electronics and Benchmark Electronics.
Diversification Opportunities for UMC Electronics and Benchmark Electronics
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UMC and Benchmark is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding UMC Electronics Co and Benchmark Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Electronics 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 Benchmark Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Electronics has no effect on the direction of UMC Electronics i.e., UMC Electronics and Benchmark Electronics go up and down completely randomly.
Pair Corralation between UMC Electronics and Benchmark Electronics
Assuming the 90 days horizon UMC Electronics Co is expected to under-perform the Benchmark Electronics. In addition to that, UMC Electronics is 1.23 times more volatile than Benchmark Electronics. It trades about -0.01 of its total potential returns per unit of risk. Benchmark Electronics is currently generating about 0.05 per unit of volatility. If you would invest 2,251 in Benchmark Electronics on February 7, 2024 and sell it today you would earn a total of 1,049 from holding Benchmark Electronics or generate 46.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
UMC Electronics Co vs. Benchmark Electronics
Performance |
Timeline |
UMC Electronics |
Benchmark Electronics |
UMC Electronics and Benchmark Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UMC Electronics and Benchmark Electronics
The main advantage of trading using opposite UMC Electronics and Benchmark Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMC Electronics position performs unexpectedly, Benchmark 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 Benchmark Electronics will offset losses from the drop in Benchmark Electronics' long position.UMC Electronics vs. Superior Plus Corp | UMC Electronics vs. Origin Agritech | UMC Electronics vs. Identiv | UMC Electronics vs. INTUITIVE SURGICAL |
Benchmark Electronics vs. Fevertree Drinks PLC | Benchmark Electronics vs. Coeur Mining | Benchmark Electronics vs. MCEWEN MINING INC | Benchmark Electronics vs. BOSTON BEER A |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |