Correlation Between WIN Semiconductors and CoAsia Microelectronics
Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors and CoAsia Microelectronics 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 CoAsia Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and CoAsia Microelectronics, you can compare the effects of market volatilities on WIN Semiconductors and CoAsia Microelectronics 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 CoAsia Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and CoAsia Microelectronics.
Diversification Opportunities for WIN Semiconductors and CoAsia Microelectronics
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WIN and CoAsia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and CoAsia Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoAsia Microelectronics 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 CoAsia Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoAsia Microelectronics has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and CoAsia Microelectronics go up and down completely randomly.
Pair Corralation between WIN Semiconductors and CoAsia Microelectronics
Assuming the 90 days trading horizon WIN Semiconductors is expected to generate 1.05 times more return on investment than CoAsia Microelectronics. However, WIN Semiconductors is 1.05 times more volatile than CoAsia Microelectronics. It trades about -0.13 of its potential returns per unit of risk. CoAsia Microelectronics is currently generating about -0.22 per unit of risk. If you would invest 11,050 in WIN Semiconductors on October 22, 2024 and sell it today you would lose (700.00) from holding WIN Semiconductors or give up 6.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIN Semiconductors vs. CoAsia Microelectronics
Performance |
| Timeline |
| WIN Semiconductors |
| CoAsia Microelectronics |
WIN Semiconductors and CoAsia Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIN Semiconductors and CoAsia Microelectronics
The main advantage of trading using opposite WIN Semiconductors and CoAsia Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors position performs unexpectedly, CoAsia Microelectronics 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 CoAsia Microelectronics will offset losses from the drop in CoAsia Microelectronics' 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 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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