Correlation Between Orient Semiconductor and Chun Yuan
Can any of the company-specific risk be diversified away by investing in both Orient Semiconductor and Chun Yuan 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 Orient Semiconductor and Chun Yuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Semiconductor Electronics and Chun Yuan Steel, you can compare the effects of market volatilities on Orient Semiconductor and Chun Yuan 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 Orient Semiconductor with a short position of Chun Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Semiconductor and Chun Yuan.
Diversification Opportunities for Orient Semiconductor and Chun Yuan
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Orient and Chun is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Orient Semiconductor Electroni and Chun Yuan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chun Yuan Steel and Orient Semiconductor 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 Orient Semiconductor Electronics are associated (or correlated) with Chun Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chun Yuan Steel has no effect on the direction of Orient Semiconductor i.e., Orient Semiconductor and Chun Yuan go up and down completely randomly.
Pair Corralation between Orient Semiconductor and Chun Yuan
Assuming the 90 days trading horizon Orient Semiconductor Electronics is expected to under-perform the Chun Yuan. In addition to that, Orient Semiconductor is 1.73 times more volatile than Chun Yuan Steel. It trades about -0.11 of its total potential returns per unit of risk. Chun Yuan Steel is currently generating about 0.02 per unit of volatility. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Semiconductor Electroni vs. Chun Yuan Steel
Performance |
| Timeline |
| Orient Semiconductor |
| Chun Yuan Steel |
Orient Semiconductor and Chun Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Semiconductor and Chun Yuan
The main advantage of trading using opposite Orient Semiconductor and Chun Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Semiconductor position performs unexpectedly, Chun Yuan 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 Chun Yuan will offset losses from the drop in Chun Yuan's long position.| Orient Semiconductor vs. Novatek Microelectronics Corp | Orient Semiconductor vs. Quanta Computer | Orient Semiconductor vs. United Microelectronics |
| Chun Yuan vs. Cheng Shin Rubber | Chun Yuan vs. Taiwan Cement Corp | Chun Yuan vs. China Steel Chemical | Chun Yuan vs. Yulon Motor Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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