Correlation Between Greatek Electronics and Nanya Technology
Can any of the company-specific risk be diversified away by investing in both Greatek Electronics and Nanya 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 Greatek Electronics and Nanya Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatek Electronics and Nanya Technology Corp, you can compare the effects of market volatilities on Greatek Electronics and Nanya 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 Greatek Electronics with a short position of Nanya Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatek Electronics and Nanya Technology.
Diversification Opportunities for Greatek Electronics and Nanya Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greatek and Nanya is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Greatek Electronics and Nanya Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanya Technology Corp and Greatek Electronics 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 Greatek Electronics are associated (or correlated) with Nanya Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanya Technology Corp has no effect on the direction of Greatek Electronics i.e., Greatek Electronics and Nanya Technology go up and down completely randomly.
Pair Corralation between Greatek Electronics and Nanya Technology
Assuming the 90 days trading horizon Greatek Electronics is expected to generate 0.59 times more return on investment than Nanya Technology. However, Greatek Electronics is 1.7 times less risky than Nanya Technology. It trades about 0.01 of its potential returns per unit of risk. Nanya Technology Corp is currently generating about -0.19 per unit of risk. If you would invest 6,120 in Greatek Electronics on October 25, 2024 and sell it today you would earn a total of 80.00 from holding Greatek Electronics or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatek Electronics vs. Nanya Technology Corp
Performance |
| Timeline |
| Greatek Electronics |
| Nanya Technology Corp |
Greatek Electronics and Nanya Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatek Electronics and Nanya Technology
The main advantage of trading using opposite Greatek Electronics and Nanya Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatek Electronics position performs unexpectedly, Nanya 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 Nanya Technology will offset losses from the drop in Nanya Technology's long position.| Greatek Electronics vs. King Yuan Electronics | Greatek Electronics vs. Powertech Technology | Greatek Electronics vs. Realtek Semiconductor Corp | Greatek Electronics vs. Elan Microelectronics Corp |
| Nanya Technology vs. Winbond Electronics Corp | Nanya Technology vs. AU Optronics | Nanya Technology vs. Macronix International Co | Nanya 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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