Correlation Between Orient Semiconductor and Cayman Tung
Can any of the company-specific risk be diversified away by investing in both Orient Semiconductor and Cayman Tung 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 Cayman Tung 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 Cayman Tung Ling, you can compare the effects of market volatilities on Orient Semiconductor and Cayman Tung 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 Cayman Tung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Semiconductor and Cayman Tung.
Diversification Opportunities for Orient Semiconductor and Cayman Tung
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Orient and Cayman is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Orient Semiconductor Electroni and Cayman Tung Ling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cayman Tung Ling 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 Cayman Tung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cayman Tung Ling has no effect on the direction of Orient Semiconductor i.e., Orient Semiconductor and Cayman Tung go up and down completely randomly.
Pair Corralation between Orient Semiconductor and Cayman Tung
Assuming the 90 days trading horizon Orient Semiconductor Electronics is expected to generate 1.68 times more return on investment than Cayman Tung. However, Orient Semiconductor is 1.68 times more volatile than Cayman Tung Ling. It trades about -0.06 of its potential returns per unit of risk. Cayman Tung Ling is currently generating about -0.17 per unit of risk. If you would invest 4,065 in Orient Semiconductor Electronics on September 3, 2024 and sell it today you would lose (505.00) from holding Orient Semiconductor Electronics or give up 12.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Semiconductor Electroni vs. Cayman Tung Ling
Performance |
| Timeline |
| Orient Semiconductor |
| Cayman Tung Ling |
Orient Semiconductor and Cayman Tung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Semiconductor and Cayman Tung
The main advantage of trading using opposite Orient Semiconductor and Cayman Tung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Semiconductor position performs unexpectedly, Cayman Tung 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 Cayman Tung will offset losses from the drop in Cayman Tung's long position.| Orient Semiconductor vs. Taiwan Semiconductor Manufacturing | Orient Semiconductor vs. Yang Ming Marine | Orient Semiconductor vs. ASE Industrial Holding | Orient Semiconductor vs. AU Optronics |
| Cayman Tung vs. Carnival Industrial Corp | Cayman Tung vs. YuantaP shares Taiwan Top | Cayman Tung vs. YuantaP shares Taiwan Mid Cap | Cayman Tung vs. Fubon MSCI Taiwan |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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