Correlation Between Winstek Semiconductor and Formosa Petrochemical
Can any of the company-specific risk be diversified away by investing in both Winstek Semiconductor and Formosa Petrochemical 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 Winstek Semiconductor and Formosa Petrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winstek Semiconductor Co and Formosa Petrochemical Corp, you can compare the effects of market volatilities on Winstek Semiconductor and Formosa Petrochemical 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 Winstek Semiconductor with a short position of Formosa Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winstek Semiconductor and Formosa Petrochemical.
Diversification Opportunities for Winstek Semiconductor and Formosa Petrochemical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Winstek and Formosa is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Winstek Semiconductor Co and Formosa Petrochemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formosa Petrochemical and Winstek Semiconductor 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 Winstek Semiconductor Co are associated (or correlated) with Formosa Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formosa Petrochemical has no effect on the direction of Winstek Semiconductor i.e., Winstek Semiconductor and Formosa Petrochemical go up and down completely randomly.
Pair Corralation between Winstek Semiconductor and Formosa Petrochemical
Assuming the 90 days trading horizon Winstek Semiconductor Co is expected to generate 1.74 times more return on investment than Formosa Petrochemical. However, Winstek Semiconductor is 1.74 times more volatile than Formosa Petrochemical Corp. It trades about 0.03 of its potential returns per unit of risk. Formosa Petrochemical Corp is currently generating about -0.18 per unit of risk. If you would invest 9,054 in Winstek Semiconductor Co on September 3, 2024 and sell it today you would earn a total of 1,296 from holding Winstek Semiconductor Co or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winstek Semiconductor Co vs. Formosa Petrochemical Corp
Performance |
| Timeline |
| Winstek Semiconductor |
| Formosa Petrochemical |
Winstek Semiconductor and Formosa Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winstek Semiconductor and Formosa Petrochemical
The main advantage of trading using opposite Winstek Semiconductor and Formosa Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winstek Semiconductor position performs unexpectedly, Formosa Petrochemical 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 Formosa Petrochemical will offset losses from the drop in Formosa Petrochemical's long position.| Winstek Semiconductor vs. WIN Semiconductors | Winstek Semiconductor vs. Delta Electronics | Winstek Semiconductor vs. WiseChip Semiconductor | Winstek Semiconductor vs. Novatek Microelectronics Corp |
| Formosa Petrochemical vs. Taishin Financial Holding | Formosa Petrochemical vs. Oceanic Beverages Co | Formosa Petrochemical vs. Union Bank of | Formosa Petrochemical vs. Professional Computer Technology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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