Correlation Between WIN Semiconductors and AP Memory
Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors and AP Memory 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 AP Memory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and AP Memory Technology, you can compare the effects of market volatilities on WIN Semiconductors and AP Memory 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 AP Memory. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and AP Memory.
Diversification Opportunities for WIN Semiconductors and AP Memory
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WIN and 6531 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and AP Memory Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Memory Technology 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 AP Memory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Memory Technology has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and AP Memory go up and down completely randomly.
Pair Corralation between WIN Semiconductors and AP Memory
Assuming the 90 days trading horizon WIN Semiconductors is expected to under-perform the AP Memory. But the stock apears to be less risky and, when comparing its historical volatility, WIN Semiconductors is 1.16 times less risky than AP Memory. The stock trades about 0.0 of its potential returns per unit of risk. The AP Memory Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 17,000 in AP Memory Technology on September 13, 2024 and sell it today you would earn a total of 14,100 from holding AP Memory Technology or generate 82.94% 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. AP Memory Technology
Performance |
| Timeline |
| WIN Semiconductors |
| AP Memory Technology |
WIN Semiconductors and AP Memory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIN Semiconductors and AP Memory
The main advantage of trading using opposite WIN Semiconductors and AP Memory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors position performs unexpectedly, AP Memory 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 AP Memory will offset losses from the drop in AP Memory'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 |
| AP Memory vs. WIN Semiconductors | AP Memory vs. GlobalWafers Co | AP Memory vs. Novatek Microelectronics Corp | AP Memory vs. Ruentex Development 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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