Correlation Between WIN Semiconductors and C Media
Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors and C Media 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 C Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and C Media Electronics, you can compare the effects of market volatilities on WIN Semiconductors and C Media 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 C Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and C Media.
Diversification Opportunities for WIN Semiconductors and C Media
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WIN and 6237 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and C Media Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Media 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 C Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Media Electronics has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and C Media go up and down completely randomly.
Pair Corralation between WIN Semiconductors and C Media
Assuming the 90 days trading horizon WIN Semiconductors is expected to under-perform the C Media. But the stock apears to be less risky and, when comparing its historical volatility, WIN Semiconductors is 1.72 times less risky than C Media. The stock trades about -0.17 of its potential returns per unit of risk. The C Media Electronics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,480 in C Media Electronics on November 7, 2024 and sell it today you would earn a total of 20.00 from holding C Media Electronics or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIN Semiconductors vs. C Media Electronics
Performance |
| Timeline |
| WIN Semiconductors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| C Media Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
WIN Semiconductors and C Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIN Semiconductors and C Media
The main advantage of trading using opposite WIN Semiconductors and C Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors position performs unexpectedly, C Media 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 C Media will offset losses from the drop in C Media's long position.The idea behind WIN Semiconductors and C Media Electronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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