Correlation Between Winbond Electronics and Chroma ATE
Can any of the company-specific risk be diversified away by investing in both Winbond Electronics and Chroma ATE 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 Chroma ATE 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 Chroma ATE, you can compare the effects of market volatilities on Winbond Electronics and Chroma ATE 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 Chroma ATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and Chroma ATE.
Diversification Opportunities for Winbond Electronics and Chroma ATE
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Winbond and Chroma is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and Chroma ATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chroma ATE 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 Chroma ATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chroma ATE has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and Chroma ATE go up and down completely randomly.
Pair Corralation between Winbond Electronics and Chroma ATE
Assuming the 90 days trading horizon Winbond Electronics Corp is expected to under-perform the Chroma ATE. But the stock apears to be less risky and, when comparing its historical volatility, Winbond Electronics Corp is 1.32 times less risky than Chroma ATE. The stock trades about -0.02 of its potential returns per unit of risk. The Chroma ATE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 17,850 in Chroma ATE on September 2, 2024 and sell it today you would earn a total of 23,400 from holding Chroma ATE or generate 131.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winbond Electronics Corp vs. Chroma ATE
Performance |
| Timeline |
| Winbond Electronics Corp |
| Chroma ATE |
Winbond Electronics and Chroma ATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winbond Electronics and Chroma ATE
The main advantage of trading using opposite Winbond Electronics and Chroma ATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winbond Electronics position performs unexpectedly, Chroma ATE 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 Chroma ATE will offset losses from the drop in Chroma ATE'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 |
| Chroma ATE vs. Accton Technology Corp | Chroma ATE vs. Delta Electronics | Chroma ATE vs. Chicony Electronics Co | Chroma ATE vs. Advantech 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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