Correlation Between Nanya Technology and Walsin Technology

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nanya Technology and Walsin 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 Nanya Technology and Walsin Technology 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 Walsin Technology Corp, you can compare the effects of market volatilities on Nanya Technology and Walsin 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 Nanya Technology with a short position of Walsin Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanya Technology and Walsin Technology.

Diversification Opportunities for Nanya Technology and Walsin Technology

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Nanya and Walsin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nanya Technology Corp and Walsin Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Technology Corp 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 Walsin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Technology Corp has no effect on the direction of Nanya Technology i.e., Nanya Technology and Walsin Technology go up and down completely randomly.

Pair Corralation between Nanya Technology and Walsin Technology

Assuming the 90 days trading horizon Nanya Technology Corp is expected to generate 2.97 times more return on investment than Walsin Technology. However, Nanya Technology is 2.97 times more volatile than Walsin Technology Corp. It trades about 0.64 of its potential returns per unit of risk. Walsin Technology Corp is currently generating about 0.31 per unit of risk. If you would invest  2,795  in Nanya Technology Corp on November 28, 2024 and sell it today you would earn a total of  1,495  from holding Nanya Technology Corp or generate 53.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Nanya Technology Corp  vs.  Walsin Technology Corp

 Performance 
       Timeline  
Nanya Technology Corp 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nanya Technology Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nanya Technology showed solid returns over the last few months and may actually be approaching a breakup point.
Walsin Technology Corp 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Walsin Technology Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Walsin Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nanya Technology and Walsin Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nanya Technology and Walsin Technology

The main advantage of trading using opposite Nanya Technology and Walsin Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanya Technology position performs unexpectedly, Walsin 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 Walsin Technology will offset losses from the drop in Walsin Technology's long position.
The idea behind Nanya Technology Corp and Walsin Technology Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

Other Complementary Tools

Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Transaction History
View history of all your transactions and understand their impact on performance
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes