Correlation Between Nan Ya and Ichia Technologies
Can any of the company-specific risk be diversified away by investing in both Nan Ya and Ichia Technologies 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 Nan Ya and Ichia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Ya Plastics and Ichia Technologies, you can compare the effects of market volatilities on Nan Ya and Ichia Technologies 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 Nan Ya with a short position of Ichia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Ichia Technologies.
Diversification Opportunities for Nan Ya and Ichia Technologies
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nan and Ichia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Plastics and Ichia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichia Technologies and Nan Ya 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 Nan Ya Plastics are associated (or correlated) with Ichia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichia Technologies has no effect on the direction of Nan Ya i.e., Nan Ya and Ichia Technologies go up and down completely randomly.
Pair Corralation between Nan Ya and Ichia Technologies
Assuming the 90 days trading horizon Nan Ya Plastics is expected to under-perform the Ichia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Nan Ya Plastics is 1.08 times less risky than Ichia Technologies. The stock trades about -0.1 of its potential returns per unit of risk. The Ichia Technologies is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 4,195 in Ichia Technologies on September 12, 2024 and sell it today you would lose (325.00) from holding Ichia Technologies or give up 7.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Ya Plastics vs. Ichia Technologies
Performance |
| Timeline |
| Nan Ya Plastics |
| Ichia Technologies |
Nan Ya and Ichia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Ichia Technologies
The main advantage of trading using opposite Nan Ya and Ichia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya position performs unexpectedly, Ichia Technologies 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 Ichia Technologies will offset losses from the drop in Ichia Technologies' long position.| Nan Ya vs. Tainan Spinning Co | Nan Ya vs. Lealea Enterprise Co | Nan Ya vs. China Petrochemical Development | Nan Ya vs. Ruentex Development Co |
| Ichia Technologies vs. AU Optronics | Ichia Technologies vs. Innolux Corp | Ichia Technologies vs. Ruentex Development Co | Ichia Technologies vs. WiseChip 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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