Correlation Between Wonik Ips and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both Wonik Ips and ITM Semiconductor 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 Wonik Ips and ITM Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonik Ips Co and ITM Semiconductor Co, you can compare the effects of market volatilities on Wonik Ips and ITM Semiconductor 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 Wonik Ips with a short position of ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonik Ips and ITM Semiconductor.
Diversification Opportunities for Wonik Ips and ITM Semiconductor
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wonik and ITM is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Wonik Ips Co and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor and Wonik Ips 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 Wonik Ips Co are associated (or correlated) with ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of Wonik Ips i.e., Wonik Ips and ITM Semiconductor go up and down completely randomly.
Pair Corralation between Wonik Ips and ITM Semiconductor
Assuming the 90 days trading horizon Wonik Ips Co is expected to generate 0.87 times more return on investment than ITM Semiconductor. However, Wonik Ips Co is 1.15 times less risky than ITM Semiconductor. It trades about -0.01 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.03 per unit of risk. If you would invest 3,196,116 in Wonik Ips Co on September 1, 2024 and sell it today you would lose (911,116) from holding Wonik Ips Co or give up 28.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.77% |
| Values | Daily Returns |
Wonik Ips Co vs. ITM Semiconductor Co
Performance |
| Timeline |
| Wonik Ips |
| ITM Semiconductor |
Wonik Ips and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonik Ips and ITM Semiconductor
The main advantage of trading using opposite Wonik Ips and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonik Ips position performs unexpectedly, ITM Semiconductor 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.The idea behind Wonik Ips Co and ITM Semiconductor Co 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.| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. Tokai Carbon Korea | ITM Semiconductor vs. People 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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