Correlation Between Novatek Microelectronics and WT Microelectronics
Can any of the company-specific risk be diversified away by investing in both Novatek Microelectronics and WT Microelectronics 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 WT Microelectronics 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 WT Microelectronics Co, you can compare the effects of market volatilities on Novatek Microelectronics and WT Microelectronics 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 WT Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novatek Microelectronics and WT Microelectronics.
Diversification Opportunities for Novatek Microelectronics and WT Microelectronics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Novatek and 3036 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Novatek Microelectronics Corp and WT Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Microelectronics 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 WT Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Microelectronics has no effect on the direction of Novatek Microelectronics i.e., Novatek Microelectronics and WT Microelectronics go up and down completely randomly.
Pair Corralation between Novatek Microelectronics and WT Microelectronics
Assuming the 90 days trading horizon Novatek Microelectronics is expected to generate 1.44 times less return on investment than WT Microelectronics. But when comparing it to its historical volatility, Novatek Microelectronics Corp is 1.43 times less risky than WT Microelectronics. It trades about 0.06 of its potential returns per unit of risk. WT Microelectronics Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,874 in WT Microelectronics Co on September 14, 2024 and sell it today you would earn a total of 4,826 from holding WT Microelectronics Co or generate 82.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Novatek Microelectronics Corp vs. WT Microelectronics Co
Performance |
| Timeline |
| Novatek Microelectronics |
| WT Microelectronics |
Novatek Microelectronics and WT Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novatek Microelectronics and WT Microelectronics
The main advantage of trading using opposite Novatek Microelectronics and WT Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novatek Microelectronics position performs unexpectedly, WT Microelectronics 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 WT Microelectronics will offset losses from the drop in WT Microelectronics' long position.| Novatek Microelectronics vs. Sunmax Biotechnology Co | Novatek Microelectronics vs. Yeou Yih Steel | Novatek Microelectronics vs. Chun Yuan Steel | Novatek Microelectronics vs. Tait Marketing Distribution |
| WT Microelectronics vs. WPG Holdings | WT Microelectronics vs. Novatek Microelectronics Corp | WT Microelectronics vs. King Yuan Electronics | WT Microelectronics vs. Synnex Technology International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |