Correlation Between Walsin Lihwa and Yulon
Can any of the company-specific risk be diversified away by investing in both Walsin Lihwa and Yulon 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 Yulon 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 Yulon Motor Co, you can compare the effects of market volatilities on Walsin Lihwa and Yulon 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 Yulon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walsin Lihwa and Yulon.
Diversification Opportunities for Walsin Lihwa and Yulon
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walsin and Yulon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Walsin Lihwa Corp and Yulon Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Motor 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 Yulon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Motor has no effect on the direction of Walsin Lihwa i.e., Walsin Lihwa and Yulon go up and down completely randomly.
Pair Corralation between Walsin Lihwa and Yulon
Assuming the 90 days trading horizon Walsin Lihwa Corp is expected to under-perform the Yulon. But the stock apears to be less risky and, when comparing its historical volatility, Walsin Lihwa Corp is 1.03 times less risky than Yulon. The stock trades about -0.12 of its potential returns per unit of risk. The Yulon Motor Co is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 7,040 in Yulon Motor Co on September 1, 2024 and sell it today you would lose (1,460) from holding Yulon Motor Co or give up 20.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Walsin Lihwa Corp vs. Yulon Motor Co
Performance |
| Timeline |
| Walsin Lihwa Corp |
| Yulon Motor |
Walsin Lihwa and Yulon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walsin Lihwa and Yulon
The main advantage of trading using opposite Walsin Lihwa and Yulon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walsin Lihwa position performs unexpectedly, Yulon 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 Yulon will offset losses from the drop in Yulon'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 |
| Yulon vs. China Motor Corp | Yulon vs. China Steel Corp | Yulon vs. Nan Ya Plastics | Yulon vs. Chang Hwa Commercial |
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.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |