Correlation Between WIN Semiconductors and King Yuan
Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors and King Yuan 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 WIN Semiconductors and King Yuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and King Yuan Electronics, you can compare the effects of market volatilities on WIN Semiconductors and King Yuan 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 WIN Semiconductors with a short position of King Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and King Yuan.
Diversification Opportunities for WIN Semiconductors and King Yuan
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WIN and King is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and King Yuan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Yuan Electronics and WIN Semiconductors 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 WIN Semiconductors are associated (or correlated) with King Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Yuan Electronics has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and King Yuan go up and down completely randomly.
Pair Corralation between WIN Semiconductors and King Yuan
Assuming the 90 days trading horizon WIN Semiconductors is expected to under-perform the King Yuan. But the stock apears to be less risky and, when comparing its historical volatility, WIN Semiconductors is 1.23 times less risky than King Yuan. The stock trades about -0.11 of its potential returns per unit of risk. The King Yuan Electronics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10,550 in King Yuan Electronics on October 26, 2024 and sell it today you would earn a total of 800.00 from holding King Yuan Electronics or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIN Semiconductors vs. King Yuan Electronics
Performance |
| Timeline |
| WIN Semiconductors |
| King Yuan Electronics |
WIN Semiconductors and King Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIN Semiconductors and King Yuan
The main advantage of trading using opposite WIN Semiconductors and King Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors position performs unexpectedly, King Yuan 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 King Yuan will offset losses from the drop in King Yuan's long position.| WIN Semiconductors vs. LARGAN Precision Co | WIN Semiconductors vs. GlobalWafers Co | WIN Semiconductors vs. Novatek Microelectronics Corp | WIN Semiconductors vs. Advanced Wireless Semiconductor |
| King Yuan vs. Unimicron Technology Corp | King Yuan vs. Kinsus Interconnect Technology | King Yuan vs. Novatek Microelectronics Corp | King Yuan vs. Delta Electronics |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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