Correlation Between WIN Semiconductors and BizLink Holding
Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors and BizLink Holding 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 BizLink Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and BizLink Holding, you can compare the effects of market volatilities on WIN Semiconductors and BizLink Holding 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 BizLink Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and BizLink Holding.
Diversification Opportunities for WIN Semiconductors and BizLink Holding
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WIN and BizLink is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and BizLink Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BizLink Holding 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 BizLink Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BizLink Holding has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and BizLink Holding go up and down completely randomly.
Pair Corralation between WIN Semiconductors and BizLink Holding
Assuming the 90 days trading horizon WIN Semiconductors is expected to generate 0.63 times more return on investment than BizLink Holding. However, WIN Semiconductors is 1.6 times less risky than BizLink Holding. It trades about 0.37 of its potential returns per unit of risk. BizLink Holding is currently generating about 0.22 per unit of risk. If you would invest 10,000 in WIN Semiconductors on November 27, 2024 and sell it today you would earn a total of 1,400 from holding WIN Semiconductors or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIN Semiconductors vs. BizLink Holding
Performance |
| Timeline |
| WIN Semiconductors |
| BizLink Holding |
WIN Semiconductors and BizLink Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIN Semiconductors and BizLink Holding
The main advantage of trading using opposite WIN Semiconductors and BizLink Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors position performs unexpectedly, BizLink Holding 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 BizLink Holding will offset losses from the drop in BizLink Holding'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 |
| BizLink Holding vs. Hota Industrial Mfg | BizLink Holding vs. Chroma ATE | BizLink Holding vs. Sinbon Electronics Co | BizLink Holding vs. Tong Hsing Electronic |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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