Correlation Between King Yuan and WT Microelectronics
Can any of the company-specific risk be diversified away by investing in both King Yuan and WT Microelectronics 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 King Yuan and WT Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between King Yuan Electronics and WT Microelectronics Co, you can compare the effects of market volatilities on King Yuan and WT Microelectronics 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 King Yuan with a short position of WT Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Yuan and WT Microelectronics.
Diversification Opportunities for King Yuan and WT Microelectronics
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between King and 3036 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding King Yuan Electronics and WT Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Microelectronics and King Yuan 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 King Yuan Electronics are associated (or correlated) with WT Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Microelectronics has no effect on the direction of King Yuan i.e., King Yuan and WT Microelectronics go up and down completely randomly.
Pair Corralation between King Yuan and WT Microelectronics
Assuming the 90 days trading horizon King Yuan Electronics is expected to generate 1.0 times more return on investment than WT Microelectronics. However, King Yuan is 1.0 times more volatile than WT Microelectronics Co. It trades about 0.1 of its potential returns per unit of risk. WT Microelectronics Co is currently generating about 0.06 per unit of risk. If you would invest 3,640 in King Yuan Electronics on September 14, 2024 and sell it today you would earn a total of 7,960 from holding King Yuan Electronics or generate 218.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
King Yuan Electronics vs. WT Microelectronics Co
Performance |
| Timeline |
| King Yuan Electronics |
| WT Microelectronics |
King Yuan and WT Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Yuan and WT Microelectronics
The main advantage of trading using opposite King Yuan and WT Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Yuan position performs unexpectedly, WT Microelectronics 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 WT Microelectronics will offset losses from the drop in WT Microelectronics' long position.| King Yuan vs. AU Optronics | King Yuan vs. Innolux Corp | King Yuan vs. Ruentex Development Co | King Yuan vs. WiseChip Semiconductor |
| WT Microelectronics vs. WPG Holdings | WT Microelectronics vs. Novatek Microelectronics Corp | WT Microelectronics vs. King Yuan Electronics | WT Microelectronics vs. Synnex Technology International |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |