Correlation Between Walsin Technology and General Interface
Can any of the company-specific risk be diversified away by investing in both Walsin Technology and General Interface 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 General Interface 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 General Interface Solution, you can compare the effects of market volatilities on Walsin Technology and General Interface 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 General Interface. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walsin Technology and General Interface.
Diversification Opportunities for Walsin Technology and General Interface
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walsin and General is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Walsin Technology Corp and General Interface Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Interface 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 General Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Interface has no effect on the direction of Walsin Technology i.e., Walsin Technology and General Interface go up and down completely randomly.
Pair Corralation between Walsin Technology and General Interface
Assuming the 90 days trading horizon Walsin Technology Corp is expected to generate 0.95 times more return on investment than General Interface. However, Walsin Technology Corp is 1.06 times less risky than General Interface. It trades about -0.2 of its potential returns per unit of risk. General Interface Solution is currently generating about -0.43 per unit of risk. If you would invest 10,200 in Walsin Technology Corp on September 2, 2024 and sell it today you would lose (780.00) from holding Walsin Technology Corp or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walsin Technology Corp vs. General Interface Solution
Performance |
| Timeline |
| Walsin Technology Corp |
| General Interface |
Walsin Technology and General Interface Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walsin Technology and General Interface
The main advantage of trading using opposite Walsin Technology and General Interface positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walsin Technology position performs unexpectedly, General Interface 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 General Interface will offset losses from the drop in General Interface'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 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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