Correlation Between First Copper and WiseChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both First Copper and WiseChip Semiconductor 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 First Copper and WiseChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Copper Technology and WiseChip Semiconductor, you can compare the effects of market volatilities on First Copper and WiseChip Semiconductor 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 First Copper with a short position of WiseChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Copper and WiseChip Semiconductor.
Diversification Opportunities for First Copper and WiseChip Semiconductor
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and WiseChip is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding First Copper Technology and WiseChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiseChip Semiconductor and First Copper 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 First Copper Technology are associated (or correlated) with WiseChip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiseChip Semiconductor has no effect on the direction of First Copper i.e., First Copper and WiseChip Semiconductor go up and down completely randomly.
Pair Corralation between First Copper and WiseChip Semiconductor
Assuming the 90 days trading horizon First Copper Technology is expected to generate 1.18 times more return on investment than WiseChip Semiconductor. However, First Copper is 1.18 times more volatile than WiseChip Semiconductor. It trades about 0.02 of its potential returns per unit of risk. WiseChip Semiconductor is currently generating about -0.03 per unit of risk. If you would invest 3,555 in First Copper Technology on October 25, 2024 and sell it today you would earn a total of 175.00 from holding First Copper Technology or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Copper Technology vs. WiseChip Semiconductor
Performance |
| Timeline |
| First Copper Technology |
| WiseChip Semiconductor |
First Copper and WiseChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Copper and WiseChip Semiconductor
The main advantage of trading using opposite First Copper and WiseChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Copper position performs unexpectedly, WiseChip Semiconductor 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 WiseChip Semiconductor will offset losses from the drop in WiseChip Semiconductor's long position.| First Copper vs. Chung Hung Steel | First Copper vs. Ta Chen Stainless | First Copper vs. Tung Ho Steel | First Copper vs. Yieh Phui Enterprise |
| WiseChip Semiconductor vs. First Copper Technology | WiseChip Semiconductor vs. Sunspring Metal Corp | WiseChip Semiconductor vs. Holiday Entertainment Co | WiseChip Semiconductor vs. U Tech Media 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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