Correlation Between Walsin Technology and Holy Stone
Can any of the company-specific risk be diversified away by investing in both Walsin Technology and Holy Stone 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 Holy Stone 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 Holy Stone Enterprise, you can compare the effects of market volatilities on Walsin Technology and Holy Stone 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 Holy Stone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walsin Technology and Holy Stone.
Diversification Opportunities for Walsin Technology and Holy Stone
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walsin and Holy is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Walsin Technology Corp and Holy Stone Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holy Stone Enterprise 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 Holy Stone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holy Stone Enterprise has no effect on the direction of Walsin Technology i.e., Walsin Technology and Holy Stone go up and down completely randomly.
Pair Corralation between Walsin Technology and Holy Stone
Assuming the 90 days trading horizon Walsin Technology Corp is expected to under-perform the Holy Stone. In addition to that, Walsin Technology is 3.53 times more volatile than Holy Stone Enterprise. It trades about -0.25 of its total potential returns per unit of risk. Holy Stone Enterprise is currently generating about 0.04 per unit of volatility. If you would invest 8,950 in Holy Stone Enterprise on August 30, 2024 and sell it today you would earn a total of 40.00 from holding Holy Stone Enterprise or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walsin Technology Corp vs. Holy Stone Enterprise
Performance |
| Timeline |
| Walsin Technology Corp |
| Holy Stone Enterprise |
Walsin Technology and Holy Stone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walsin Technology and Holy Stone
The main advantage of trading using opposite Walsin Technology and Holy Stone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walsin Technology position performs unexpectedly, Holy Stone 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 Holy Stone will offset losses from the drop in Holy Stone'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 |
| Holy Stone vs. Walsin Technology Corp | Holy Stone vs. Yageo Corp | Holy Stone vs. Tripod Technology Corp | Holy Stone vs. Asia Optical Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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