Correlation Between King Yuan and Powertech Technology
Can any of the company-specific risk be diversified away by investing in both King Yuan 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 King Yuan and Powertech Technology 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 Powertech Technology, you can compare the effects of market volatilities on King Yuan 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 King Yuan with a short position of Powertech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Yuan and Powertech Technology.
Diversification Opportunities for King Yuan and Powertech Technology
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between King and Powertech is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding King Yuan Electronics and Powertech Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powertech Technology 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 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 King Yuan i.e., King Yuan and Powertech Technology go up and down completely randomly.
Pair Corralation between King Yuan and Powertech Technology
Assuming the 90 days trading horizon King Yuan Electronics is expected to generate 1.43 times more return on investment than Powertech Technology. However, King Yuan is 1.43 times more volatile than Powertech Technology. It trades about -0.04 of its potential returns per unit of risk. Powertech Technology is currently generating about -0.11 per unit of risk. If you would invest 12,850 in King Yuan Electronics on August 29, 2024 and sell it today you would lose (300.00) from holding King Yuan Electronics or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
King Yuan Electronics vs. Powertech Technology
Performance |
| Timeline |
| King Yuan Electronics |
| Powertech Technology |
King Yuan and Powertech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Yuan and Powertech Technology
The main advantage of trading using opposite King Yuan and Powertech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Yuan 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.| King Yuan vs. Powertech Technology | King Yuan vs. Novatek Microelectronics Corp | King Yuan vs. Greatek Electronics | King Yuan vs. Nanya Technology Corp |
| Powertech Technology vs. Novatek Microelectronics Corp | Powertech Technology vs. King Yuan Electronics | Powertech Technology vs. Realtek Semiconductor Corp | Powertech Technology vs. Nanya 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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