Correlation Between Kinsus Interconnect and Wistron NeWeb
Can any of the company-specific risk be diversified away by investing in both Kinsus Interconnect and Wistron NeWeb 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 Kinsus Interconnect and Wistron NeWeb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinsus Interconnect Technology and Wistron NeWeb Corp, you can compare the effects of market volatilities on Kinsus Interconnect and Wistron NeWeb 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 Kinsus Interconnect with a short position of Wistron NeWeb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsus Interconnect and Wistron NeWeb.
Diversification Opportunities for Kinsus Interconnect and Wistron NeWeb
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kinsus and Wistron is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kinsus Interconnect Technology and Wistron NeWeb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wistron NeWeb Corp and Kinsus Interconnect 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 Kinsus Interconnect Technology are associated (or correlated) with Wistron NeWeb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wistron NeWeb Corp has no effect on the direction of Kinsus Interconnect i.e., Kinsus Interconnect and Wistron NeWeb go up and down completely randomly.
Pair Corralation between Kinsus Interconnect and Wistron NeWeb
Assuming the 90 days trading horizon Kinsus Interconnect is expected to generate 43.03 times less return on investment than Wistron NeWeb. But when comparing it to its historical volatility, Kinsus Interconnect Technology is 1.04 times less risky than Wistron NeWeb. It trades about 0.0 of its potential returns per unit of risk. Wistron NeWeb Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,570 in Wistron NeWeb Corp on October 30, 2024 and sell it today you would earn a total of 5,630 from holding Wistron NeWeb Corp or generate 65.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinsus Interconnect Technology vs. Wistron NeWeb Corp
Performance |
| Timeline |
| Kinsus Interconnect |
| Wistron NeWeb Corp |
Kinsus Interconnect and Wistron NeWeb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsus Interconnect and Wistron NeWeb
The main advantage of trading using opposite Kinsus Interconnect and Wistron NeWeb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsus Interconnect position performs unexpectedly, Wistron NeWeb 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 Wistron NeWeb will offset losses from the drop in Wistron NeWeb's long position.| Kinsus Interconnect vs. Unimicron Technology Corp | Kinsus Interconnect vs. Nan Ya Printed | Kinsus Interconnect vs. Novatek Microelectronics Corp | Kinsus Interconnect vs. Powertech Technology |
| Wistron NeWeb vs. Emerging Display Technologies | Wistron NeWeb vs. WinMate Communication INC | Wistron NeWeb vs. U Media Communications | Wistron NeWeb vs. Li Kang Biomedical |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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