Correlation Between Amtran Technology and Walsin Lihwa
Can any of the company-specific risk be diversified away by investing in both Amtran Technology and Walsin Lihwa 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 Amtran Technology and Walsin Lihwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amtran Technology Co and Walsin Lihwa Corp, you can compare the effects of market volatilities on Amtran Technology and Walsin Lihwa 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 Amtran Technology with a short position of Walsin Lihwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amtran Technology and Walsin Lihwa.
Diversification Opportunities for Amtran Technology and Walsin Lihwa
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amtran and Walsin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Amtran Technology Co and Walsin Lihwa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Lihwa Corp and Amtran 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 Amtran Technology Co are associated (or correlated) with Walsin Lihwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Lihwa Corp has no effect on the direction of Amtran Technology i.e., Amtran Technology and Walsin Lihwa go up and down completely randomly.
Pair Corralation between Amtran Technology and Walsin Lihwa
Assuming the 90 days trading horizon Amtran Technology Co is expected to generate 0.84 times more return on investment than Walsin Lihwa. However, Amtran Technology Co is 1.18 times less risky than Walsin Lihwa. It trades about -0.19 of its potential returns per unit of risk. Walsin Lihwa Corp is currently generating about -0.23 per unit of risk. If you would invest 2,175 in Amtran Technology Co on August 29, 2024 and sell it today you would lose (165.00) from holding Amtran Technology Co or give up 7.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amtran Technology Co vs. Walsin Lihwa Corp
Performance |
| Timeline |
| Amtran Technology |
| Walsin Lihwa Corp |
Amtran Technology and Walsin Lihwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amtran Technology and Walsin Lihwa
The main advantage of trading using opposite Amtran Technology and Walsin Lihwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amtran Technology position performs unexpectedly, Walsin Lihwa 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 Walsin Lihwa will offset losses from the drop in Walsin Lihwa's long position.| Amtran Technology vs. Yulon Finance Corp | Amtran Technology vs. Taiwan Secom Co | Amtran Technology vs. Great Wall Enterprise |
| Walsin Lihwa vs. Yulon Motor Co | Walsin Lihwa vs. Far Eastern Department | Walsin Lihwa vs. China Steel Corp | Walsin Lihwa vs. Chang Hwa Commercial |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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