Correlation Between Bin Chuan and WIN Semiconductors
Can any of the company-specific risk be diversified away by investing in both Bin Chuan 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 Bin Chuan and WIN Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bin Chuan Enterprise and WIN Semiconductors, you can compare the effects of market volatilities on Bin Chuan 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 Bin Chuan with a short position of WIN Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bin Chuan and WIN Semiconductors.
Diversification Opportunities for Bin Chuan and WIN Semiconductors
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bin and WIN is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bin Chuan Enterprise and WIN Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIN Semiconductors and Bin Chuan 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 Bin Chuan Enterprise 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 Bin Chuan i.e., Bin Chuan and WIN Semiconductors go up and down completely randomly.
Pair Corralation between Bin Chuan and WIN Semiconductors
Assuming the 90 days trading horizon Bin Chuan Enterprise is expected to generate 2.77 times more return on investment than WIN Semiconductors. However, Bin Chuan is 2.77 times more volatile than WIN Semiconductors. It trades about 0.51 of its potential returns per unit of risk. WIN Semiconductors is currently generating about 0.09 per unit of risk. If you would invest 3,930 in Bin Chuan Enterprise on September 5, 2024 and sell it today you would earn a total of 2,380 from holding Bin Chuan Enterprise or generate 60.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bin Chuan Enterprise vs. WIN Semiconductors
Performance |
| Timeline |
| Bin Chuan Enterprise |
| WIN Semiconductors |
Bin Chuan and WIN Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bin Chuan and WIN Semiconductors
The main advantage of trading using opposite Bin Chuan and WIN Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bin Chuan 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.| Bin Chuan vs. Catcher Technology Co | Bin Chuan vs. Evergreen Steel Corp | Bin Chuan vs. China Metal Products | Bin Chuan vs. Chernan Metal Industrial |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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