Correlation Between Nan Ya and Amazing Microelectronic
Can any of the company-specific risk be diversified away by investing in both Nan Ya and Amazing Microelectronic 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 Amazing Microelectronic 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 Amazing Microelectronic, you can compare the effects of market volatilities on Nan Ya and Amazing Microelectronic 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 Amazing Microelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Amazing Microelectronic.
Diversification Opportunities for Nan Ya and Amazing Microelectronic
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nan and Amazing is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Plastics and Amazing Microelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazing Microelectronic 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 Amazing Microelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazing Microelectronic has no effect on the direction of Nan Ya i.e., Nan Ya and Amazing Microelectronic go up and down completely randomly.
Pair Corralation between Nan Ya and Amazing Microelectronic
Assuming the 90 days trading horizon Nan Ya Plastics is expected to under-perform the Amazing Microelectronic. But the stock apears to be less risky and, when comparing its historical volatility, Nan Ya Plastics is 1.05 times less risky than Amazing Microelectronic. The stock trades about -0.35 of its potential returns per unit of risk. The Amazing Microelectronic is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9,380 in Amazing Microelectronic on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Amazing Microelectronic or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Ya Plastics vs. Amazing Microelectronic
Performance |
| Timeline |
| Nan Ya Plastics |
| Amazing Microelectronic |
Nan Ya and Amazing Microelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Amazing Microelectronic
The main advantage of trading using opposite Nan Ya and Amazing Microelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya position performs unexpectedly, Amazing Microelectronic 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 Amazing Microelectronic will offset losses from the drop in Amazing Microelectronic's 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 |
| Amazing Microelectronic vs. Chernan Metal Industrial | Amazing Microelectronic vs. Hannstar Display Corp | Amazing Microelectronic vs. Min Aik Technology | Amazing Microelectronic vs. STL Technology Co |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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