Correlation Between Nanya Technology and Powertech Technology
Can any of the company-specific risk be diversified away by investing in both Nanya Technology and Powertech 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 Powertech 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 Powertech Technology, you can compare the effects of market volatilities on Nanya Technology and Powertech 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 Powertech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanya Technology and Powertech Technology.
Diversification Opportunities for Nanya Technology and Powertech Technology
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nanya and Powertech is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nanya Technology Corp and Powertech Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powertech Technology 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 Powertech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powertech Technology has no effect on the direction of Nanya Technology i.e., Nanya Technology and Powertech Technology go up and down completely randomly.
Pair Corralation between Nanya Technology and Powertech Technology
Assuming the 90 days trading horizon Nanya Technology Corp is expected to under-perform the Powertech Technology. In addition to that, Nanya Technology is 1.09 times more volatile than Powertech Technology. It trades about -0.42 of its total potential returns per unit of risk. Powertech Technology is currently generating about -0.14 per unit of volatility. If you would invest 13,250 in Powertech Technology on August 25, 2024 and sell it today you would lose (750.00) from holding Powertech Technology or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanya Technology Corp vs. Powertech Technology
Performance |
| Timeline |
| Nanya Technology Corp |
| Powertech Technology |
Nanya Technology and Powertech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanya Technology and Powertech Technology
The main advantage of trading using opposite Nanya Technology and Powertech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanya Technology position performs unexpectedly, Powertech 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 Powertech Technology will offset losses from the drop in Powertech Technology's long position.| Nanya Technology vs. Novatek Microelectronics Corp | Nanya Technology vs. Quanta Computer | Nanya Technology vs. United Microelectronics |
| Powertech Technology vs. Novatek Microelectronics Corp | Powertech Technology vs. Quanta Computer | Powertech Technology vs. United Microelectronics |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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