Correlation Between Champion Microelectronic and Globe Union
Can any of the company-specific risk be diversified away by investing in both Champion Microelectronic and Globe Union 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 Globe Union 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 Globe Union Industrial, you can compare the effects of market volatilities on Champion Microelectronic and Globe Union 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 Globe Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Microelectronic and Globe Union.
Diversification Opportunities for Champion Microelectronic and Globe Union
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Champion and Globe is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Champion Microelectronic Corp and Globe Union Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Union Industrial 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 Globe Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Union Industrial has no effect on the direction of Champion Microelectronic i.e., Champion Microelectronic and Globe Union go up and down completely randomly.
Pair Corralation between Champion Microelectronic and Globe Union
Assuming the 90 days trading horizon Champion Microelectronic Corp is expected to generate 1.2 times more return on investment than Globe Union. However, Champion Microelectronic is 1.2 times more volatile than Globe Union Industrial. It trades about 0.01 of its potential returns per unit of risk. Globe Union Industrial is currently generating about -0.07 per unit of risk. If you would invest 6,330 in Champion Microelectronic Corp on September 3, 2024 and sell it today you would lose (50.00) from holding Champion Microelectronic Corp or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Microelectronic Corp vs. Globe Union Industrial
Performance |
| Timeline |
| Champion Microelectronic |
| Globe Union Industrial |
Champion Microelectronic and Globe Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Microelectronic and Globe Union
The main advantage of trading using opposite Champion Microelectronic and Globe Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Microelectronic position performs unexpectedly, Globe Union 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 Globe Union will offset losses from the drop in Globe Union's long position.| Champion Microelectronic vs. Nuvoton Technology Corp | Champion Microelectronic vs. Generalplus Technology | Champion Microelectronic vs. Holtek Semiconductor | Champion Microelectronic vs. Scientech Corp |
| Globe Union vs. Universal Microelectronics Co | Globe Union vs. AVerMedia Technologies | Globe Union vs. Symtek Automation Asia | Globe Union vs. WiseChip 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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