Correlation Between Walsin Technology and Cameo Communications
Can any of the company-specific risk be diversified away by investing in both Walsin Technology and Cameo Communications 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 Cameo Communications 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 Cameo Communications, you can compare the effects of market volatilities on Walsin Technology and Cameo Communications 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 Cameo Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walsin Technology and Cameo Communications.
Diversification Opportunities for Walsin Technology and Cameo Communications
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walsin and Cameo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Walsin Technology Corp and Cameo Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameo Communications 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 Cameo Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameo Communications has no effect on the direction of Walsin Technology i.e., Walsin Technology and Cameo Communications go up and down completely randomly.
Pair Corralation between Walsin Technology and Cameo Communications
Assuming the 90 days trading horizon Walsin Technology Corp is expected to generate 0.97 times more return on investment than Cameo Communications. However, Walsin Technology Corp is 1.03 times less risky than Cameo Communications. It trades about -0.03 of its potential returns per unit of risk. Cameo Communications is currently generating about -0.32 per unit of risk. If you would invest 9,410 in Walsin Technology Corp on October 28, 2024 and sell it today you would lose (120.00) from holding Walsin Technology Corp or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walsin Technology Corp vs. Cameo Communications
Performance |
| Timeline |
| Walsin Technology Corp |
| Cameo Communications |
Walsin Technology and Cameo Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walsin Technology and Cameo Communications
The main advantage of trading using opposite Walsin Technology and Cameo Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walsin Technology position performs unexpectedly, Cameo Communications 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 Cameo Communications will offset losses from the drop in Cameo Communications' long position.| Walsin Technology vs. Unimicron Technology Corp | Walsin Technology vs. Kinsus Interconnect Technology | Walsin Technology vs. Novatek Microelectronics Corp | Walsin Technology vs. Delta Electronics |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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