Correlation Between Lingsen Precision and Winbond Electronics
Can any of the company-specific risk be diversified away by investing in both Lingsen Precision and Winbond Electronics 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 Lingsen Precision and Winbond Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lingsen Precision Industries and Winbond Electronics Corp, you can compare the effects of market volatilities on Lingsen Precision and Winbond Electronics 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 Lingsen Precision with a short position of Winbond Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingsen Precision and Winbond Electronics.
Diversification Opportunities for Lingsen Precision and Winbond Electronics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lingsen and Winbond is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lingsen Precision Industries and Winbond Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winbond Electronics Corp and Lingsen Precision 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 Lingsen Precision Industries are associated (or correlated) with Winbond Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winbond Electronics Corp has no effect on the direction of Lingsen Precision i.e., Lingsen Precision and Winbond Electronics go up and down completely randomly.
Pair Corralation between Lingsen Precision and Winbond Electronics
Assuming the 90 days trading horizon Lingsen Precision is expected to generate 17.84 times less return on investment than Winbond Electronics. But when comparing it to its historical volatility, Lingsen Precision Industries is 2.92 times less risky than Winbond Electronics. It trades about 0.07 of its potential returns per unit of risk. Winbond Electronics Corp is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,430 in Winbond Electronics Corp on December 1, 2024 and sell it today you would earn a total of 440.00 from holding Winbond Electronics Corp or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lingsen Precision Industries vs. Winbond Electronics Corp
Performance |
| Timeline |
| Lingsen Precision |
| Winbond Electronics Corp |
Lingsen Precision and Winbond Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lingsen Precision and Winbond Electronics
The main advantage of trading using opposite Lingsen Precision and Winbond Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingsen Precision position performs unexpectedly, Winbond Electronics 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 Winbond Electronics will offset losses from the drop in Winbond Electronics' long position.| Lingsen Precision vs. Sunplus Technology Co | Lingsen Precision vs. Silicon Integrated Systems | Lingsen Precision vs. Realtek Semiconductor Corp | Lingsen Precision vs. Elan Microelectronics Corp |
| Winbond Electronics vs. Macronix International Co | Winbond Electronics vs. United Microelectronics | Winbond Electronics vs. Mosel Vitelic | Winbond Electronics vs. Nanya Technology 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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