Correlation Between Walsin Lihwa and Sampo Corp
Can any of the company-specific risk be diversified away by investing in both Walsin Lihwa and Sampo Corp 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 Walsin Lihwa and Sampo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walsin Lihwa Corp and Sampo Corp, you can compare the effects of market volatilities on Walsin Lihwa and Sampo Corp 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 Walsin Lihwa with a short position of Sampo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walsin Lihwa and Sampo Corp.
Diversification Opportunities for Walsin Lihwa and Sampo Corp
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walsin and Sampo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Walsin Lihwa Corp and Sampo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo Corp and Walsin Lihwa 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 Walsin Lihwa Corp are associated (or correlated) with Sampo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampo Corp has no effect on the direction of Walsin Lihwa i.e., Walsin Lihwa and Sampo Corp go up and down completely randomly.
Pair Corralation between Walsin Lihwa and Sampo Corp
Assuming the 90 days trading horizon Walsin Lihwa Corp is expected to under-perform the Sampo Corp. In addition to that, Walsin Lihwa is 6.71 times more volatile than Sampo Corp. It trades about -0.01 of its total potential returns per unit of risk. Sampo Corp is currently generating about 0.0 per unit of volatility. If you would invest 2,805 in Sampo Corp on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Sampo Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walsin Lihwa Corp vs. Sampo Corp
Performance |
| Timeline |
| Walsin Lihwa Corp |
| Sampo Corp |
Walsin Lihwa and Sampo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walsin Lihwa and Sampo Corp
The main advantage of trading using opposite Walsin Lihwa and Sampo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walsin Lihwa position performs unexpectedly, Sampo Corp 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 Sampo Corp will offset losses from the drop in Sampo Corp's long position.| Walsin Lihwa vs. TECO Electric Machinery | Walsin Lihwa vs. Far Eastern New | Walsin Lihwa vs. Nan Ya Plastics | Walsin Lihwa vs. Winbond Electronics Corp |
| Sampo Corp vs. TECO Electric Machinery | Sampo Corp vs. Walsin Lihwa Corp | Sampo Corp vs. Asia Cement Corp | Sampo Corp vs. Far Eastern New |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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