Correlation Between Kaimei Electronic and Wafer Works
Can any of the company-specific risk be diversified away by investing in both Kaimei Electronic and Wafer Works 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 Kaimei Electronic and Wafer Works into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaimei Electronic Corp and Wafer Works, you can compare the effects of market volatilities on Kaimei Electronic and Wafer Works 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 Kaimei Electronic with a short position of Wafer Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaimei Electronic and Wafer Works.
Diversification Opportunities for Kaimei Electronic and Wafer Works
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kaimei and Wafer is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kaimei Electronic Corp and Wafer Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wafer Works and Kaimei Electronic 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 Kaimei Electronic Corp are associated (or correlated) with Wafer Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wafer Works has no effect on the direction of Kaimei Electronic i.e., Kaimei Electronic and Wafer Works go up and down completely randomly.
Pair Corralation between Kaimei Electronic and Wafer Works
Assuming the 90 days trading horizon Kaimei Electronic Corp is expected to generate 1.26 times more return on investment than Wafer Works. However, Kaimei Electronic is 1.26 times more volatile than Wafer Works. It trades about 0.01 of its potential returns per unit of risk. Wafer Works is currently generating about -0.03 per unit of risk. If you would invest 6,003 in Kaimei Electronic Corp on August 30, 2024 and sell it today you would earn a total of 197.00 from holding Kaimei Electronic Corp or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kaimei Electronic Corp vs. Wafer Works
Performance |
| Timeline |
| Kaimei Electronic Corp |
| Wafer Works |
Kaimei Electronic and Wafer Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaimei Electronic and Wafer Works
The main advantage of trading using opposite Kaimei Electronic and Wafer Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaimei Electronic position performs unexpectedly, Wafer Works 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 Wafer Works will offset losses from the drop in Wafer Works' long position.| Kaimei Electronic vs. Yageo Corp | Kaimei Electronic vs. Taiwan Mask Corp | Kaimei Electronic vs. Macronix International Co | Kaimei Electronic vs. Gold Circuit Electronics |
| Wafer Works vs. Sino American Silicon Products | Wafer Works vs. GlobalWafers Co | Wafer Works vs. Motech Industries Co | Wafer Works vs. Formosa Sumco Technology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |