Correlation Between Winbond Electronics and Innolux Corp
Can any of the company-specific risk be diversified away by investing in both Winbond Electronics and Innolux Corp 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 Innolux Corp 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 Innolux Corp, you can compare the effects of market volatilities on Winbond Electronics and Innolux Corp 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 Innolux Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and Innolux Corp.
Diversification Opportunities for Winbond Electronics and Innolux Corp
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Winbond and Innolux is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and Innolux Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innolux 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 Innolux Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innolux Corp has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and Innolux Corp go up and down completely randomly.
Pair Corralation between Winbond Electronics and Innolux Corp
Assuming the 90 days trading horizon Winbond Electronics Corp is expected to under-perform the Innolux Corp. But the stock apears to be less risky and, when comparing its historical volatility, Winbond Electronics Corp is 1.12 times less risky than Innolux Corp. The stock trades about -0.02 of its potential returns per unit of risk. The Innolux Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,120 in Innolux Corp on September 3, 2024 and sell it today you would earn a total of 395.00 from holding Innolux Corp or generate 35.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Winbond Electronics Corp vs. Innolux Corp
Performance |
| Timeline |
| Winbond Electronics Corp |
| Innolux Corp |
Winbond Electronics and Innolux Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winbond Electronics and Innolux Corp
The main advantage of trading using opposite Winbond Electronics and Innolux Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winbond Electronics position performs unexpectedly, Innolux Corp 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 Innolux Corp will offset losses from the drop in Innolux Corp'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 |
| Innolux Corp vs. AU Optronics | Innolux Corp vs. China Steel Corp | Innolux Corp vs. Hon Hai Precision | Innolux Corp vs. Delta Electronics |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |