Correlation Between WIN Semiconductors and Parade Technologies
Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors and Parade Technologies 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 Parade Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and Parade Technologies, you can compare the effects of market volatilities on WIN Semiconductors and Parade Technologies 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 Parade Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and Parade Technologies.
Diversification Opportunities for WIN Semiconductors and Parade Technologies
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WIN and Parade is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and Parade Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parade Technologies 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 Parade Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parade Technologies has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and Parade Technologies go up and down completely randomly.
Pair Corralation between WIN Semiconductors and Parade Technologies
Assuming the 90 days trading horizon WIN Semiconductors is expected to under-perform the Parade Technologies. But the stock apears to be less risky and, when comparing its historical volatility, WIN Semiconductors is 1.38 times less risky than Parade Technologies. The stock trades about -0.14 of its potential returns per unit of risk. The Parade Technologies is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 71,600 in Parade Technologies on September 1, 2024 and sell it today you would lose (2,100) from holding Parade Technologies or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIN Semiconductors vs. Parade Technologies
Performance |
| Timeline |
| WIN Semiconductors |
| Parade Technologies |
WIN Semiconductors and Parade Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIN Semiconductors and Parade Technologies
The main advantage of trading using opposite WIN Semiconductors and Parade Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors position performs unexpectedly, Parade Technologies 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 Parade Technologies will offset losses from the drop in Parade Technologies' 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 |
| Parade Technologies vs. Aspeed Technology | Parade Technologies vs. Silergy Corp | Parade Technologies vs. Novatek Microelectronics Corp | Parade Technologies vs. WIN Semiconductors |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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