Correlation Between Winbond Electronics and Champion Microelectronic
Can any of the company-specific risk be diversified away by investing in both Winbond Electronics and Champion Microelectronic 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 Champion Microelectronic 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 Champion Microelectronic Corp, you can compare the effects of market volatilities on Winbond Electronics and Champion Microelectronic 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 Champion Microelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and Champion Microelectronic.
Diversification Opportunities for Winbond Electronics and Champion Microelectronic
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Winbond and Champion is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and Champion Microelectronic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Microelectronic 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 Champion Microelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Microelectronic has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and Champion Microelectronic go up and down completely randomly.
Pair Corralation between Winbond Electronics and Champion Microelectronic
Assuming the 90 days trading horizon Winbond Electronics Corp is expected to under-perform the Champion Microelectronic. But the stock apears to be less risky and, when comparing its historical volatility, Winbond Electronics Corp is 1.31 times less risky than Champion Microelectronic. The stock trades about -0.4 of its potential returns per unit of risk. The Champion Microelectronic Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 6,600 in Champion Microelectronic Corp on September 3, 2024 and sell it today you would lose (320.00) from holding Champion Microelectronic Corp or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winbond Electronics Corp vs. Champion Microelectronic Corp
Performance |
| Timeline |
| Winbond Electronics Corp |
| Champion Microelectronic |
Winbond Electronics and Champion Microelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winbond Electronics and Champion Microelectronic
The main advantage of trading using opposite Winbond Electronics and Champion Microelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winbond Electronics position performs unexpectedly, Champion Microelectronic 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 Champion Microelectronic will offset losses from the drop in Champion Microelectronic'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 |
| Champion Microelectronic vs. Nuvoton Technology Corp | Champion Microelectronic vs. Generalplus Technology | Champion Microelectronic vs. Holtek Semiconductor | Champion Microelectronic vs. Scientech 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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