Correlation Between Winbond Electronics and Global Unichip
Can any of the company-specific risk be diversified away by investing in both Winbond Electronics and Global Unichip 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 Global Unichip 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 Global Unichip Corp, you can compare the effects of market volatilities on Winbond Electronics and Global Unichip 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 Global Unichip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and Global Unichip.
Diversification Opportunities for Winbond Electronics and Global Unichip
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Winbond and Global is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and Global Unichip Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Unichip 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 Global Unichip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Unichip Corp has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and Global Unichip go up and down completely randomly.
Pair Corralation between Winbond Electronics and Global Unichip
Assuming the 90 days trading horizon Winbond Electronics Corp is expected to under-perform the Global Unichip. But the stock apears to be less risky and, when comparing its historical volatility, Winbond Electronics Corp is 1.82 times less risky than Global Unichip. The stock trades about -0.37 of its potential returns per unit of risk. The Global Unichip Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 110,000 in Global Unichip Corp on August 30, 2024 and sell it today you would earn a total of 8,000 from holding Global Unichip Corp or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winbond Electronics Corp vs. Global Unichip Corp
Performance |
| Timeline |
| Winbond Electronics Corp |
| Global Unichip Corp |
Winbond Electronics and Global Unichip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winbond Electronics and Global Unichip
The main advantage of trading using opposite Winbond Electronics and Global Unichip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winbond Electronics position performs unexpectedly, Global Unichip 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 Global Unichip will offset losses from the drop in Global Unichip'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 |
| Global Unichip vs. Alchip Technologies | Global Unichip vs. Realtek Semiconductor Corp | Global Unichip vs. Faraday Technology Corp | Global Unichip vs. Novatek Microelectronics 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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