Correlation Between Chun Yuan and WIN Semiconductors
Can any of the company-specific risk be diversified away by investing in both Chun Yuan 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 Chun Yuan and WIN Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chun Yuan Steel and WIN Semiconductors, you can compare the effects of market volatilities on Chun Yuan 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 Chun Yuan with a short position of WIN Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chun Yuan and WIN Semiconductors.
Diversification Opportunities for Chun Yuan and WIN Semiconductors
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chun and WIN is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Chun Yuan Steel and WIN Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIN Semiconductors and Chun Yuan 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 Chun Yuan Steel 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 Chun Yuan i.e., Chun Yuan and WIN Semiconductors go up and down completely randomly.
Pair Corralation between Chun Yuan and WIN Semiconductors
Assuming the 90 days trading horizon Chun Yuan Steel is expected to generate 0.64 times more return on investment than WIN Semiconductors. However, Chun Yuan Steel is 1.55 times less risky than WIN Semiconductors. It trades about 0.02 of its potential returns per unit of risk. WIN Semiconductors is currently generating about -0.04 per unit of risk. If you would invest 1,745 in Chun Yuan Steel on August 25, 2024 and sell it today you would earn a total of 90.00 from holding Chun Yuan Steel or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Chun Yuan Steel vs. WIN Semiconductors
Performance |
| Timeline |
| Chun Yuan Steel |
| WIN Semiconductors |
Chun Yuan and WIN Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chun Yuan and WIN Semiconductors
The main advantage of trading using opposite Chun Yuan and WIN Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chun Yuan 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.| Chun Yuan vs. Cheng Shin Rubber | Chun Yuan vs. Taiwan Cement Corp | Chun Yuan vs. China Steel Chemical | Chun Yuan vs. Yulon Motor Co |
| WIN Semiconductors vs. Global Unichip Corp | WIN Semiconductors vs. Asmedia Technology | WIN Semiconductors vs. Unimicron Technology Corp | 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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