Correlation Between Higher Way and GlobalWafers
Can any of the company-specific risk be diversified away by investing in both Higher Way and GlobalWafers 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 Higher Way and GlobalWafers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Higher Way Electronic and GlobalWafers Co, you can compare the effects of market volatilities on Higher Way and GlobalWafers 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 Higher Way with a short position of GlobalWafers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Higher Way and GlobalWafers.
Diversification Opportunities for Higher Way and GlobalWafers
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Higher and GlobalWafers is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Higher Way Electronic and GlobalWafers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalWafers and Higher Way 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 Higher Way Electronic are associated (or correlated) with GlobalWafers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalWafers has no effect on the direction of Higher Way i.e., Higher Way and GlobalWafers go up and down completely randomly.
Pair Corralation between Higher Way and GlobalWafers
Assuming the 90 days trading horizon Higher Way Electronic is expected to under-perform the GlobalWafers. In addition to that, Higher Way is 1.01 times more volatile than GlobalWafers Co. It trades about -0.45 of its total potential returns per unit of risk. GlobalWafers Co is currently generating about -0.04 per unit of volatility. If you would invest 35,315 in GlobalWafers Co on October 24, 2024 and sell it today you would lose (815.00) from holding GlobalWafers Co or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Higher Way Electronic vs. GlobalWafers Co
Performance |
| Timeline |
| Higher Way Electronic |
| GlobalWafers |
Higher Way and GlobalWafers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Higher Way and GlobalWafers
The main advantage of trading using opposite Higher Way and GlobalWafers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Higher Way position performs unexpectedly, GlobalWafers 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 GlobalWafers will offset losses from the drop in GlobalWafers' long position.| Higher Way vs. Microelectronics Technology | Higher Way vs. Jetwell Computer Co | Higher Way vs. Yuan High Tech Development | Higher Way vs. Emerging Display Technologies |
| GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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