Correlation Between Novatek Microelectronics and De Licacy
Can any of the company-specific risk be diversified away by investing in both Novatek Microelectronics and De Licacy 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 Novatek Microelectronics and De Licacy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novatek Microelectronics Corp and De Licacy Industrial, you can compare the effects of market volatilities on Novatek Microelectronics and De Licacy 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 Novatek Microelectronics with a short position of De Licacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novatek Microelectronics and De Licacy.
Diversification Opportunities for Novatek Microelectronics and De Licacy
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Novatek and 1464 is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Novatek Microelectronics Corp and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial and Novatek Microelectronics 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 Novatek Microelectronics Corp are associated (or correlated) with De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of Novatek Microelectronics i.e., Novatek Microelectronics and De Licacy go up and down completely randomly.
Pair Corralation between Novatek Microelectronics and De Licacy
Assuming the 90 days trading horizon Novatek Microelectronics Corp is expected to under-perform the De Licacy. But the stock apears to be less risky and, when comparing its historical volatility, Novatek Microelectronics Corp is 1.17 times less risky than De Licacy. The stock trades about -0.1 of its potential returns per unit of risk. The De Licacy Industrial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,335 in De Licacy Industrial on September 3, 2024 and sell it today you would earn a total of 220.00 from holding De Licacy Industrial or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novatek Microelectronics Corp vs. De Licacy Industrial
Performance |
| Timeline |
| Novatek Microelectronics |
| De Licacy Industrial |
Novatek Microelectronics and De Licacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novatek Microelectronics and De Licacy
The main advantage of trading using opposite Novatek Microelectronics and De Licacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novatek Microelectronics position performs unexpectedly, De Licacy 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 De Licacy will offset losses from the drop in De Licacy's long position.| Novatek Microelectronics vs. First Hotel Co | Novatek Microelectronics vs. BenQ Materials Corp | Novatek Microelectronics vs. FarGlory Hotel Co | Novatek Microelectronics vs. Grand Plastic Technology |
| De Licacy vs. Tainan Spinning Co | De Licacy vs. Chia Her Industrial | De Licacy vs. WiseChip Semiconductor | De Licacy 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |