Correlation Between Nanya Technology and King Yuan
Can any of the company-specific risk be diversified away by investing in both Nanya Technology and King Yuan 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 Nanya Technology and King Yuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanya Technology Corp and King Yuan Electronics, you can compare the effects of market volatilities on Nanya Technology and King Yuan 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 Nanya Technology with a short position of King Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanya Technology and King Yuan.
Diversification Opportunities for Nanya Technology and King Yuan
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nanya and King is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nanya Technology Corp and King Yuan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Yuan Electronics and Nanya Technology 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 Nanya Technology Corp are associated (or correlated) with King Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Yuan Electronics has no effect on the direction of Nanya Technology i.e., Nanya Technology and King Yuan go up and down completely randomly.
Pair Corralation between Nanya Technology and King Yuan
Assuming the 90 days trading horizon Nanya Technology Corp is expected to under-perform the King Yuan. But the stock apears to be less risky and, when comparing its historical volatility, Nanya Technology Corp is 1.38 times less risky than King Yuan. The stock trades about -0.09 of its potential returns per unit of risk. The King Yuan Electronics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,950 in King Yuan Electronics on August 25, 2024 and sell it today you would earn a total of 5,050 from holding King Yuan Electronics or generate 63.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanya Technology Corp vs. King Yuan Electronics
Performance |
| Timeline |
| Nanya Technology Corp |
| King Yuan Electronics |
Nanya Technology and King Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanya Technology and King Yuan
The main advantage of trading using opposite Nanya Technology and King Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanya Technology position performs unexpectedly, King Yuan 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 King Yuan will offset losses from the drop in King Yuan's long position.| Nanya Technology vs. Novatek Microelectronics Corp | Nanya Technology vs. Quanta Computer | Nanya Technology vs. United Microelectronics |
| King Yuan vs. Powertech Technology | King Yuan vs. Novatek Microelectronics Corp | King Yuan vs. Greatek Electronics | King Yuan 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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