Correlation Between C Tech and Walsin Lihwa
Can any of the company-specific risk be diversified away by investing in both C Tech and Walsin Lihwa 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 C Tech and Walsin Lihwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Tech United and Walsin Lihwa Corp, you can compare the effects of market volatilities on C Tech and Walsin Lihwa 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 C Tech with a short position of Walsin Lihwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Tech and Walsin Lihwa.
Diversification Opportunities for C Tech and Walsin Lihwa
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 3625 and Walsin is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding C Tech United and Walsin Lihwa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Lihwa Corp and C Tech 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 C Tech United are associated (or correlated) with Walsin Lihwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Lihwa Corp has no effect on the direction of C Tech i.e., C Tech and Walsin Lihwa go up and down completely randomly.
Pair Corralation between C Tech and Walsin Lihwa
Assuming the 90 days trading horizon C Tech United is expected to generate 3.25 times more return on investment than Walsin Lihwa. However, C Tech is 3.25 times more volatile than Walsin Lihwa Corp. It trades about 0.11 of its potential returns per unit of risk. Walsin Lihwa Corp is currently generating about -0.41 per unit of risk. If you would invest 1,775 in C Tech United on October 11, 2024 and sell it today you would earn a total of 180.00 from holding C Tech United or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Tech United vs. Walsin Lihwa Corp
Performance |
| Timeline |
| C Tech United |
| Walsin Lihwa Corp |
C Tech and Walsin Lihwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Tech and Walsin Lihwa
The main advantage of trading using opposite C Tech and Walsin Lihwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Tech position performs unexpectedly, Walsin Lihwa 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 Walsin Lihwa will offset losses from the drop in Walsin Lihwa's long position.| C Tech vs. Walsin Lihwa Corp | C Tech vs. Voltronic Power Technology | C Tech vs. Advanced Energy Solution | C Tech vs. Simplo Technology Co |
| Walsin Lihwa vs. TECO Electric Machinery | Walsin Lihwa vs. Far Eastern New | Walsin Lihwa vs. Nan Ya Plastics | Walsin Lihwa vs. Winbond Electronics 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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