Correlation Between Faraday Technology and Kinsus Interconnect
Can any of the company-specific risk be diversified away by investing in both Faraday Technology and Kinsus Interconnect 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 Faraday Technology and Kinsus Interconnect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Technology Corp and Kinsus Interconnect Technology, you can compare the effects of market volatilities on Faraday Technology and Kinsus Interconnect 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 Faraday Technology with a short position of Kinsus Interconnect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Technology and Kinsus Interconnect.
Diversification Opportunities for Faraday Technology and Kinsus Interconnect
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Faraday and Kinsus is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Technology Corp and Kinsus Interconnect Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsus Interconnect and Faraday 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 Faraday Technology Corp are associated (or correlated) with Kinsus Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsus Interconnect has no effect on the direction of Faraday Technology i.e., Faraday Technology and Kinsus Interconnect go up and down completely randomly.
Pair Corralation between Faraday Technology and Kinsus Interconnect
Assuming the 90 days trading horizon Faraday Technology Corp is expected to generate 1.44 times more return on investment than Kinsus Interconnect. However, Faraday Technology is 1.44 times more volatile than Kinsus Interconnect Technology. It trades about 0.04 of its potential returns per unit of risk. Kinsus Interconnect Technology is currently generating about 0.01 per unit of risk. If you would invest 15,900 in Faraday Technology Corp on September 13, 2024 and sell it today you would earn a total of 7,200 from holding Faraday Technology Corp or generate 45.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Technology Corp vs. Kinsus Interconnect Technology
Performance |
| Timeline |
| Faraday Technology Corp |
| Kinsus Interconnect |
Faraday Technology and Kinsus Interconnect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Technology and Kinsus Interconnect
The main advantage of trading using opposite Faraday Technology and Kinsus Interconnect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Technology position performs unexpectedly, Kinsus Interconnect 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 Kinsus Interconnect will offset losses from the drop in Kinsus Interconnect's long position.| Faraday Technology vs. Global Unichip Corp | Faraday Technology vs. Novatek Microelectronics Corp | Faraday Technology vs. Realtek Semiconductor Corp | Faraday Technology vs. Unimicron Technology Corp |
| Kinsus Interconnect vs. AU Optronics | Kinsus Interconnect vs. Innolux Corp | Kinsus Interconnect vs. Ruentex Development Co | Kinsus Interconnect vs. WiseChip 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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