Correlation Between Winbond Electronics and Far Eastern
Can any of the company-specific risk be diversified away by investing in both Winbond Electronics and Far Eastern 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 Winbond Electronics and Far Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winbond Electronics Corp and Far Eastern New, you can compare the effects of market volatilities on Winbond Electronics and Far Eastern 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 Winbond Electronics with a short position of Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and Far Eastern.
Diversification Opportunities for Winbond Electronics and Far Eastern
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Winbond and Far is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and Far Eastern New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern New and Winbond Electronics 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 Winbond Electronics Corp are associated (or correlated) with Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern New has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and Far Eastern go up and down completely randomly.
Pair Corralation between Winbond Electronics and Far Eastern
Assuming the 90 days trading horizon Winbond Electronics Corp is expected to under-perform the Far Eastern. In addition to that, Winbond Electronics is 1.53 times more volatile than Far Eastern New. It trades about -0.01 of its total potential returns per unit of risk. Far Eastern New is currently generating about 0.02 per unit of volatility. If you would invest 3,320 in Far Eastern New on August 30, 2024 and sell it today you would earn a total of 180.00 from holding Far Eastern New or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winbond Electronics Corp vs. Far Eastern New
Performance |
| Timeline |
| Winbond Electronics Corp |
| Far Eastern New |
Winbond Electronics and Far Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winbond Electronics and Far Eastern
The main advantage of trading using opposite Winbond Electronics and Far Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winbond Electronics position performs unexpectedly, Far Eastern 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 Far Eastern will offset losses from the drop in Far Eastern's long position.| Winbond Electronics vs. Macronix International Co | Winbond Electronics vs. United Microelectronics | Winbond Electronics vs. Mosel Vitelic | Winbond Electronics vs. Nanya Technology Corp |
| Far Eastern vs. Yulon Motor Co | Far Eastern vs. Far Eastern Department | Far Eastern vs. China Steel Corp | Far Eastern 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |