Correlation Between Champion Microelectronic and Generalplus Technology
Can any of the company-specific risk be diversified away by investing in both Champion Microelectronic and Generalplus Technology 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 Champion Microelectronic and Generalplus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Microelectronic Corp and Generalplus Technology, you can compare the effects of market volatilities on Champion Microelectronic and Generalplus Technology 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 Champion Microelectronic with a short position of Generalplus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Microelectronic and Generalplus Technology.
Diversification Opportunities for Champion Microelectronic and Generalplus Technology
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Champion and Generalplus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Champion Microelectronic Corp and Generalplus Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generalplus Technology and Champion Microelectronic 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 Champion Microelectronic Corp are associated (or correlated) with Generalplus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generalplus Technology has no effect on the direction of Champion Microelectronic i.e., Champion Microelectronic and Generalplus Technology go up and down completely randomly.
Pair Corralation between Champion Microelectronic and Generalplus Technology
Assuming the 90 days trading horizon Champion Microelectronic Corp is expected to generate 2.46 times more return on investment than Generalplus Technology. However, Champion Microelectronic is 2.46 times more volatile than Generalplus Technology. It trades about 0.02 of its potential returns per unit of risk. Generalplus Technology is currently generating about -0.26 per unit of risk. If you would invest 6,600 in Champion Microelectronic Corp on September 4, 2024 and sell it today you would earn a total of 40.00 from holding Champion Microelectronic Corp or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Microelectronic Corp vs. Generalplus Technology
Performance |
| Timeline |
| Champion Microelectronic |
| Generalplus Technology |
Champion Microelectronic and Generalplus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Microelectronic and Generalplus Technology
The main advantage of trading using opposite Champion Microelectronic and Generalplus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Microelectronic position performs unexpectedly, Generalplus Technology 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 Generalplus Technology will offset losses from the drop in Generalplus Technology's long position.| Champion Microelectronic vs. Taiwan Semiconductor Manufacturing | Champion Microelectronic vs. Yang Ming Marine | Champion Microelectronic vs. AU Optronics | Champion Microelectronic vs. Innolux Corp |
| Generalplus Technology vs. Taiwan Semiconductor Manufacturing | Generalplus Technology vs. Yang Ming Marine | Generalplus Technology vs. AU Optronics | Generalplus Technology vs. Innolux Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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