Correlation Between Alchip Technologies and Intai Technology
Can any of the company-specific risk be diversified away by investing in both Alchip Technologies and Intai 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 Alchip Technologies and Intai Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alchip Technologies and Intai Technology, you can compare the effects of market volatilities on Alchip Technologies and Intai 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 Alchip Technologies with a short position of Intai Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alchip Technologies and Intai Technology.
Diversification Opportunities for Alchip Technologies and Intai Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alchip and Intai is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alchip Technologies and Intai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intai Technology and Alchip Technologies 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 Alchip Technologies are associated (or correlated) with Intai Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intai Technology has no effect on the direction of Alchip Technologies i.e., Alchip Technologies and Intai Technology go up and down completely randomly.
Pair Corralation between Alchip Technologies and Intai Technology
Assuming the 90 days trading horizon Alchip Technologies is expected to generate 4.31 times more return on investment than Intai Technology. However, Alchip Technologies is 4.31 times more volatile than Intai Technology. It trades about 0.13 of its potential returns per unit of risk. Intai Technology is currently generating about 0.08 per unit of risk. If you would invest 204,000 in Alchip Technologies on September 1, 2024 and sell it today you would earn a total of 17,500 from holding Alchip Technologies or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alchip Technologies vs. Intai Technology
Performance |
| Timeline |
| Alchip Technologies |
| Intai Technology |
Alchip Technologies and Intai Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alchip Technologies and Intai Technology
The main advantage of trading using opposite Alchip Technologies and Intai Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alchip Technologies position performs unexpectedly, Intai 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 Intai Technology will offset losses from the drop in Intai Technology's long position.| Alchip Technologies vs. Taiwan Semiconductor Manufacturing | Alchip Technologies vs. MediaTek | Alchip Technologies vs. United Microelectronics | Alchip Technologies vs. Novatek Microelectronics Corp |
| Intai Technology vs. Hiwin Technologies Corp | Intai Technology vs. QST International | Intai Technology vs. Basso Industry Corp | Intai Technology vs. Topoint Technology Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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