Correlation Between Winbond Electronics and Flexium Interconnect
Can any of the company-specific risk be diversified away by investing in both Winbond Electronics and Flexium Interconnect 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 Flexium Interconnect 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 Flexium Interconnect, you can compare the effects of market volatilities on Winbond Electronics and Flexium Interconnect 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 Flexium Interconnect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and Flexium Interconnect.
Diversification Opportunities for Winbond Electronics and Flexium Interconnect
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Winbond and Flexium is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and Flexium Interconnect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexium Interconnect 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 Flexium Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexium Interconnect has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and Flexium Interconnect go up and down completely randomly.
Pair Corralation between Winbond Electronics and Flexium Interconnect
Assuming the 90 days trading horizon Winbond Electronics Corp is expected to under-perform the Flexium Interconnect. But the stock apears to be less risky and, when comparing its historical volatility, Winbond Electronics Corp is 1.09 times less risky than Flexium Interconnect. The stock trades about -0.16 of its potential returns per unit of risk. The Flexium Interconnect is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 9,160 in Flexium Interconnect on September 3, 2024 and sell it today you would lose (2,450) from holding Flexium Interconnect or give up 26.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winbond Electronics Corp vs. Flexium Interconnect
Performance |
| Timeline |
| Winbond Electronics Corp |
| Flexium Interconnect |
Winbond Electronics and Flexium Interconnect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winbond Electronics and Flexium Interconnect
The main advantage of trading using opposite Winbond Electronics and Flexium Interconnect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winbond Electronics position performs unexpectedly, Flexium Interconnect 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 Flexium Interconnect will offset losses from the drop in Flexium Interconnect'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 |
| Flexium Interconnect vs. Zhen Ding Technology | Flexium Interconnect vs. Catcher Technology Co | Flexium Interconnect vs. Unimicron Technology Corp | Flexium Interconnect vs. Career Technology MFG |
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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