Correlation Between WIN Semiconductors and Sinopower Semiconductor
Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors and Sinopower Semiconductor 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 Sinopower Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and Sinopower Semiconductor, you can compare the effects of market volatilities on WIN Semiconductors and Sinopower Semiconductor 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 Sinopower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and Sinopower Semiconductor.
Diversification Opportunities for WIN Semiconductors and Sinopower Semiconductor
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WIN and Sinopower is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and Sinopower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopower Semiconductor 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 Sinopower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopower Semiconductor has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and Sinopower Semiconductor go up and down completely randomly.
Pair Corralation between WIN Semiconductors and Sinopower Semiconductor
Assuming the 90 days trading horizon WIN Semiconductors is expected to generate 1.06 times more return on investment than Sinopower Semiconductor. However, WIN Semiconductors is 1.06 times more volatile than Sinopower Semiconductor. It trades about -0.05 of its potential returns per unit of risk. Sinopower Semiconductor is currently generating about -0.27 per unit of risk. If you would invest 11,750 in WIN Semiconductors on September 13, 2024 and sell it today you would lose (200.00) from holding WIN Semiconductors or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIN Semiconductors vs. Sinopower Semiconductor
Performance |
| Timeline |
| WIN Semiconductors |
| Sinopower Semiconductor |
WIN Semiconductors and Sinopower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIN Semiconductors and Sinopower Semiconductor
The main advantage of trading using opposite WIN Semiconductors and Sinopower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors position performs unexpectedly, Sinopower Semiconductor 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 Sinopower Semiconductor will offset losses from the drop in Sinopower Semiconductor'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 |
| Sinopower Semiconductor vs. Excelliance MOS | Sinopower Semiconductor vs. Niko Semiconductor Co | Sinopower Semiconductor vs. Advanced Power Electronics | Sinopower Semiconductor vs. Chipbond Technology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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