Correlation Between Winbond Electronics and Generalplus Technology
Can any of the company-specific risk be diversified away by investing in both Winbond Electronics and Generalplus Technology 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 Generalplus Technology 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 Generalplus Technology, you can compare the effects of market volatilities on Winbond Electronics and Generalplus Technology 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 Generalplus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and Generalplus Technology.
Diversification Opportunities for Winbond Electronics and Generalplus Technology
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Winbond and Generalplus is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and Generalplus Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generalplus Technology 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 Generalplus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generalplus Technology has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and Generalplus Technology go up and down completely randomly.
Pair Corralation between Winbond Electronics and Generalplus Technology
Assuming the 90 days trading horizon Winbond Electronics Corp is expected to under-perform the Generalplus Technology. In addition to that, Winbond Electronics is 1.7 times more volatile than Generalplus Technology. It trades about -0.39 of its total potential returns per unit of risk. Generalplus Technology is currently generating about -0.3 per unit of volatility. If you would invest 5,450 in Generalplus Technology on September 1, 2024 and sell it today you would lose (440.00) from holding Generalplus Technology or give up 8.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Winbond Electronics Corp vs. Generalplus Technology
Performance |
| Timeline |
| Winbond Electronics Corp |
| Generalplus Technology |
Winbond Electronics and Generalplus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winbond Electronics and Generalplus Technology
The main advantage of trading using opposite Winbond Electronics and Generalplus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winbond Electronics position performs unexpectedly, Generalplus Technology 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 Generalplus Technology will offset losses from the drop in Generalplus Technology'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 |
| Generalplus Technology vs. United Microelectronics | Generalplus Technology vs. Winbond Electronics 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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