Correlation Between Nanya Technology and Faraday Technology
Can any of the company-specific risk be diversified away by investing in both Nanya Technology and Faraday 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 Faraday 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 Faraday Technology Corp, you can compare the effects of market volatilities on Nanya Technology and Faraday 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 Faraday Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanya Technology and Faraday Technology.
Diversification Opportunities for Nanya Technology and Faraday Technology
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nanya and Faraday is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nanya Technology Corp and Faraday Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faraday 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 Faraday Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faraday Technology Corp has no effect on the direction of Nanya Technology i.e., Nanya Technology and Faraday Technology go up and down completely randomly.
Pair Corralation between Nanya Technology and Faraday Technology
Assuming the 90 days trading horizon Nanya Technology Corp is expected to under-perform the Faraday Technology. In addition to that, Nanya Technology is 1.13 times more volatile than Faraday Technology Corp. It trades about -0.2 of its total potential returns per unit of risk. Faraday Technology Corp is currently generating about -0.07 per unit of volatility. If you would invest 25,350 in Faraday Technology Corp on October 26, 2024 and sell it today you would lose (2,850) from holding Faraday Technology Corp or give up 11.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanya Technology Corp vs. Faraday Technology Corp
Performance |
| Timeline |
| Nanya Technology Corp |
| Faraday Technology Corp |
Nanya Technology and Faraday Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanya Technology and Faraday Technology
The main advantage of trading using opposite Nanya Technology and Faraday Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanya Technology position performs unexpectedly, Faraday 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 Faraday Technology will offset losses from the drop in Faraday Technology's long position.| Nanya Technology vs. Winbond Electronics Corp | Nanya Technology vs. AU Optronics | Nanya Technology vs. Macronix International Co | Nanya Technology vs. United Microelectronics |
| Faraday Technology vs. Global Unichip Corp | Faraday Technology vs. Novatek Microelectronics Corp | Faraday Technology vs. Realtek Semiconductor Corp | Faraday Technology vs. Unimicron 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |