Correlation Between Walsin Technology and Elite Semiconductor
Can any of the company-specific risk be diversified away by investing in both Walsin Technology and Elite 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 Walsin Technology and Elite Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walsin Technology Corp and Elite Semiconductor Memory, you can compare the effects of market volatilities on Walsin Technology and Elite 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 Walsin Technology with a short position of Elite Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walsin Technology and Elite Semiconductor.
Diversification Opportunities for Walsin Technology and Elite Semiconductor
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Walsin and Elite is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Walsin Technology Corp and Elite Semiconductor Memory in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Semiconductor and Walsin 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 Walsin Technology Corp are associated (or correlated) with Elite Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Semiconductor has no effect on the direction of Walsin Technology i.e., Walsin Technology and Elite Semiconductor go up and down completely randomly.
Pair Corralation between Walsin Technology and Elite Semiconductor
Assuming the 90 days trading horizon Walsin Technology Corp is expected to under-perform the Elite Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Walsin Technology Corp is 1.44 times less risky than Elite Semiconductor. The stock trades about -0.15 of its potential returns per unit of risk. The Elite Semiconductor Memory is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,420 in Elite Semiconductor Memory on October 10, 2024 and sell it today you would lose (50.00) from holding Elite Semiconductor Memory or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walsin Technology Corp vs. Elite Semiconductor Memory
Performance |
| Timeline |
| Walsin Technology Corp |
| Elite Semiconductor |
Walsin Technology and Elite Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walsin Technology and Elite Semiconductor
The main advantage of trading using opposite Walsin Technology and Elite Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walsin Technology position performs unexpectedly, Elite 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 Elite Semiconductor will offset losses from the drop in Elite Semiconductor's long position.| Walsin Technology vs. Yageo Corp | Walsin Technology vs. Nanya Technology Corp | Walsin Technology vs. Holy Stone Enterprise | Walsin Technology vs. Novatek Microelectronics Corp |
| Elite Semiconductor vs. Holy Stone Enterprise | Elite Semiconductor vs. Walsin Technology Corp | Elite Semiconductor vs. Yageo Corp | Elite Semiconductor vs. HannStar Board 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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