Correlation Between SemiLEDS and United Microelectronics
Can any of the company-specific risk be diversified away by investing in both SemiLEDS and United Microelectronics 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 SemiLEDS and United Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SemiLEDS and United Microelectronics, you can compare the effects of market volatilities on SemiLEDS and United Microelectronics 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 SemiLEDS with a short position of United Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SemiLEDS and United Microelectronics.
Diversification Opportunities for SemiLEDS and United Microelectronics
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SemiLEDS and United is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SemiLEDS and United Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Microelectronics and SemiLEDS 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 SemiLEDS are associated (or correlated) with United Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Microelectronics has no effect on the direction of SemiLEDS i.e., SemiLEDS and United Microelectronics go up and down completely randomly.
Pair Corralation between SemiLEDS and United Microelectronics
Given the investment horizon of 90 days SemiLEDS is expected to under-perform the United Microelectronics. In addition to that, SemiLEDS is 2.88 times more volatile than United Microelectronics. It trades about -0.16 of its total potential returns per unit of risk. United Microelectronics is currently generating about -0.04 per unit of volatility. If you would invest 718.00 in United Microelectronics on June 6, 2025 and sell it today you would lose (34.00) from holding United Microelectronics or give up 4.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SemiLEDS vs. United Microelectronics
Performance |
| Timeline |
| SemiLEDS |
| United Microelectronics |
SemiLEDS and United Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SemiLEDS and United Microelectronics
The main advantage of trading using opposite SemiLEDS and United Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SemiLEDS position performs unexpectedly, United Microelectronics 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 United Microelectronics will offset losses from the drop in United Microelectronics' long position.| SemiLEDS vs. Nano Labs | SemiLEDS vs. ChipMOS Technologies | SemiLEDS vs. Wisekey International Holding | SemiLEDS vs. Silicon Motion Technology |
| United Microelectronics vs. ASE Industrial Holding | United Microelectronics vs. Himax Technologies | United Microelectronics vs. SemiLEDS | United Microelectronics vs. ON Semiconductor |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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