Correlation Between Winbond Electronics and Walsin Lihwa
Can any of the company-specific risk be diversified away by investing in both Winbond Electronics and Walsin Lihwa 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 Walsin Lihwa 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 Walsin Lihwa Corp, you can compare the effects of market volatilities on Winbond Electronics and Walsin Lihwa 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 Walsin Lihwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and Walsin Lihwa.
Diversification Opportunities for Winbond Electronics and Walsin Lihwa
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Winbond and Walsin is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and Walsin Lihwa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Lihwa Corp 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 Walsin Lihwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Lihwa Corp has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and Walsin Lihwa go up and down completely randomly.
Pair Corralation between Winbond Electronics and Walsin Lihwa
Assuming the 90 days trading horizon Winbond Electronics Corp is expected to under-perform the Walsin Lihwa. In addition to that, Winbond Electronics is 1.09 times more volatile than Walsin Lihwa Corp. It trades about -0.2 of its total potential returns per unit of risk. Walsin Lihwa Corp is currently generating about -0.01 per unit of volatility. If you would invest 2,470 in Walsin Lihwa Corp on October 25, 2024 and sell it today you would lose (20.00) from holding Walsin Lihwa Corp or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winbond Electronics Corp vs. Walsin Lihwa Corp
Performance |
| Timeline |
| Winbond Electronics Corp |
| Walsin Lihwa Corp |
Winbond Electronics and Walsin Lihwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winbond Electronics and Walsin Lihwa
The main advantage of trading using opposite Winbond Electronics and Walsin Lihwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winbond Electronics position performs unexpectedly, Walsin Lihwa 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 Walsin Lihwa will offset losses from the drop in Walsin Lihwa'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 |
| Walsin Lihwa vs. TECO Electric Machinery | Walsin Lihwa vs. Far Eastern New | Walsin Lihwa vs. Nan Ya Plastics | Walsin Lihwa vs. Winbond Electronics 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 Stocks Directory module to find actively traded stocks across global markets.
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