Correlation Between U Ming and WIN Semiconductors
Can any of the company-specific risk be diversified away by investing in both U Ming and WIN Semiconductors 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 U Ming and WIN Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Ming Marine Transport and WIN Semiconductors, you can compare the effects of market volatilities on U Ming and WIN Semiconductors 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 U Ming with a short position of WIN Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Ming and WIN Semiconductors.
Diversification Opportunities for U Ming and WIN Semiconductors
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2606 and WIN is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding U Ming Marine Transport and WIN Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIN Semiconductors and U Ming 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 U Ming Marine Transport are associated (or correlated) with WIN Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIN Semiconductors has no effect on the direction of U Ming i.e., U Ming and WIN Semiconductors go up and down completely randomly.
Pair Corralation between U Ming and WIN Semiconductors
Assuming the 90 days trading horizon U Ming Marine Transport is expected to generate 0.96 times more return on investment than WIN Semiconductors. However, U Ming Marine Transport is 1.04 times less risky than WIN Semiconductors. It trades about 0.22 of its potential returns per unit of risk. WIN Semiconductors is currently generating about -0.13 per unit of risk. If you would invest 5,380 in U Ming Marine Transport on October 22, 2024 and sell it today you would earn a total of 540.00 from holding U Ming Marine Transport or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Ming Marine Transport vs. WIN Semiconductors
Performance |
| Timeline |
| U Ming Marine |
| WIN Semiconductors |
U Ming and WIN Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Ming and WIN Semiconductors
The main advantage of trading using opposite U Ming and WIN Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Ming position performs unexpectedly, WIN Semiconductors 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 WIN Semiconductors will offset losses from the drop in WIN Semiconductors' long position.| U Ming vs. Sincere Navigation Corp | U Ming vs. Wan Hai Lines | U Ming vs. Yang Ming Marine | U Ming vs. Formosa Chemicals Fibre |
| WIN Semiconductors vs. LARGAN Precision Co | WIN Semiconductors vs. GlobalWafers Co | WIN Semiconductors vs. Novatek Microelectronics Corp | WIN Semiconductors vs. Advanced Wireless Semiconductor |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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