Correlation Between Gudeng Precision and GlobalWafers
Can any of the company-specific risk be diversified away by investing in both Gudeng Precision 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 Gudeng Precision and GlobalWafers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gudeng Precision Industrial and GlobalWafers Co, you can compare the effects of market volatilities on Gudeng Precision 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 Gudeng Precision with a short position of GlobalWafers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gudeng Precision and GlobalWafers.
Diversification Opportunities for Gudeng Precision and GlobalWafers
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gudeng and GlobalWafers is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gudeng Precision Industrial and GlobalWafers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalWafers and Gudeng Precision 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 Gudeng Precision Industrial 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 Gudeng Precision i.e., Gudeng Precision and GlobalWafers go up and down completely randomly.
Pair Corralation between Gudeng Precision and GlobalWafers
Assuming the 90 days trading horizon Gudeng Precision Industrial is expected to under-perform the GlobalWafers. But the stock apears to be less risky and, when comparing its historical volatility, Gudeng Precision Industrial is 1.05 times less risky than GlobalWafers. The stock trades about -0.15 of its potential returns per unit of risk. The GlobalWafers Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 41,950 in GlobalWafers Co on August 30, 2024 and sell it today you would earn a total of 250.00 from holding GlobalWafers Co or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gudeng Precision Industrial vs. GlobalWafers Co
Performance |
| Timeline |
| Gudeng Precision Ind |
| GlobalWafers |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gudeng Precision and GlobalWafers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gudeng Precision and GlobalWafers
The main advantage of trading using opposite Gudeng Precision and GlobalWafers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gudeng Precision 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.| Gudeng Precision vs. Vanguard International Semiconductor | Gudeng Precision vs. Marketech International Corp | Gudeng Precision vs. WIN Semiconductors | Gudeng Precision vs. Xintec |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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