Correlation Between Grand Pacific and WIN Semiconductors
Can any of the company-specific risk be diversified away by investing in both Grand Pacific and WIN Semiconductors 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 Grand Pacific and WIN Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Pacific Petrochemical and WIN Semiconductors, you can compare the effects of market volatilities on Grand Pacific and WIN Semiconductors 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 Grand Pacific with a short position of WIN Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Pacific and WIN Semiconductors.
Diversification Opportunities for Grand Pacific and WIN Semiconductors
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grand and WIN is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Grand Pacific Petrochemical and WIN Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIN Semiconductors and Grand Pacific 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 Grand Pacific Petrochemical are associated (or correlated) with WIN Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIN Semiconductors has no effect on the direction of Grand Pacific i.e., Grand Pacific and WIN Semiconductors go up and down completely randomly.
Pair Corralation between Grand Pacific and WIN Semiconductors
Assuming the 90 days trading horizon Grand Pacific is expected to generate 4.31 times less return on investment than WIN Semiconductors. But when comparing it to its historical volatility, Grand Pacific Petrochemical is 2.07 times less risky than WIN Semiconductors. It trades about 0.0 of its potential returns per unit of risk. WIN Semiconductors is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11,550 in WIN Semiconductors on September 3, 2024 and sell it today you would earn a total of 0.00 from holding WIN Semiconductors or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Pacific Petrochemical vs. WIN Semiconductors
Performance |
| Timeline |
| Grand Pacific Petroc |
| WIN Semiconductors |
Grand Pacific and WIN Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Pacific and WIN Semiconductors
The main advantage of trading using opposite Grand Pacific and WIN Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Pacific position performs unexpectedly, WIN Semiconductors 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 WIN Semiconductors will offset losses from the drop in WIN Semiconductors' long position.| Grand Pacific vs. Formosa Plastics Corp | Grand Pacific vs. Formosa Chemicals Fibre | Grand Pacific vs. Shiny Chemical Industrial | Grand Pacific vs. China Steel Chemical |
| WIN Semiconductors vs. Sitronix Technology Corp | WIN Semiconductors vs. Kinsus Interconnect Technology | WIN Semiconductors vs. WiseChip Semiconductor | WIN Semiconductors vs. Novatek Microelectronics 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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