Correlation Between WIN Semiconductors and Gudeng Precision
Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors and Gudeng Precision 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 Gudeng Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and Gudeng Precision Industrial, you can compare the effects of market volatilities on WIN Semiconductors and Gudeng Precision 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 Gudeng Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and Gudeng Precision.
Diversification Opportunities for WIN Semiconductors and Gudeng Precision
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WIN and Gudeng is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and Gudeng Precision Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gudeng Precision Ind 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 Gudeng Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gudeng Precision Ind has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and Gudeng Precision go up and down completely randomly.
Pair Corralation between WIN Semiconductors and Gudeng Precision
Assuming the 90 days trading horizon WIN Semiconductors is expected to under-perform the Gudeng Precision. But the stock apears to be less risky and, when comparing its historical volatility, WIN Semiconductors is 1.09 times less risky than Gudeng Precision. The stock trades about -0.03 of its potential returns per unit of risk. The Gudeng Precision Industrial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 39,562 in Gudeng Precision Industrial on September 2, 2024 and sell it today you would earn a total of 10,138 from holding Gudeng Precision Industrial or generate 25.63% 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. Gudeng Precision Industrial
Performance |
| Timeline |
| WIN Semiconductors |
| Gudeng Precision Ind |
WIN Semiconductors and Gudeng Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIN Semiconductors and Gudeng Precision
The main advantage of trading using opposite WIN Semiconductors and Gudeng Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors position performs unexpectedly, Gudeng Precision 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 Gudeng Precision will offset losses from the drop in Gudeng Precision'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 |
| Gudeng Precision vs. Taiwan Semiconductor Manufacturing | Gudeng Precision vs. Hon Hai Precision | Gudeng Precision vs. MediaTek | Gudeng Precision vs. Chunghwa Telecom Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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