Correlation Between Winbond Electronics and FIC Global
Can any of the company-specific risk be diversified away by investing in both Winbond Electronics and FIC Global 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 FIC Global 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 FIC Global, you can compare the effects of market volatilities on Winbond Electronics and FIC Global 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 FIC Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and FIC Global.
Diversification Opportunities for Winbond Electronics and FIC Global
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Winbond and FIC is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and FIC Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIC Global 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 FIC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIC Global has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and FIC Global go up and down completely randomly.
Pair Corralation between Winbond Electronics and FIC Global
Assuming the 90 days trading horizon Winbond Electronics Corp is expected to under-perform the FIC Global. But the stock apears to be less risky and, when comparing its historical volatility, Winbond Electronics Corp is 1.34 times less risky than FIC Global. The stock trades about -0.02 of its potential returns per unit of risk. The FIC Global is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,050 in FIC Global on September 3, 2024 and sell it today you would lose (235.00) from holding FIC Global or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winbond Electronics Corp vs. FIC Global
Performance |
| Timeline |
| Winbond Electronics Corp |
| FIC Global |
Winbond Electronics and FIC Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winbond Electronics and FIC Global
The main advantage of trading using opposite Winbond Electronics and FIC Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winbond Electronics position performs unexpectedly, FIC Global 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 FIC Global will offset losses from the drop in FIC Global'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 |
| FIC Global vs. Taiwan Semiconductor Manufacturing | FIC Global vs. Yang Ming Marine | FIC Global vs. ASE Industrial Holding | FIC Global vs. AU Optronics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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