Correlation Between Hiwin Mikrosystem and Globaltek Fabrication
Can any of the company-specific risk be diversified away by investing in both Hiwin Mikrosystem and Globaltek Fabrication 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 Hiwin Mikrosystem and Globaltek Fabrication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hiwin Mikrosystem Corp and Globaltek Fabrication Co, you can compare the effects of market volatilities on Hiwin Mikrosystem and Globaltek Fabrication 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 Hiwin Mikrosystem with a short position of Globaltek Fabrication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hiwin Mikrosystem and Globaltek Fabrication.
Diversification Opportunities for Hiwin Mikrosystem and Globaltek Fabrication
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hiwin and Globaltek is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hiwin Mikrosystem Corp and Globaltek Fabrication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globaltek Fabrication and Hiwin Mikrosystem 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 Hiwin Mikrosystem Corp are associated (or correlated) with Globaltek Fabrication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globaltek Fabrication has no effect on the direction of Hiwin Mikrosystem i.e., Hiwin Mikrosystem and Globaltek Fabrication go up and down completely randomly.
Pair Corralation between Hiwin Mikrosystem and Globaltek Fabrication
Assuming the 90 days trading horizon Hiwin Mikrosystem Corp is expected to generate 0.95 times more return on investment than Globaltek Fabrication. However, Hiwin Mikrosystem Corp is 1.06 times less risky than Globaltek Fabrication. It trades about 0.06 of its potential returns per unit of risk. Globaltek Fabrication Co is currently generating about 0.05 per unit of risk. If you would invest 7,296 in Hiwin Mikrosystem Corp on August 31, 2024 and sell it today you would earn a total of 4,254 from holding Hiwin Mikrosystem Corp or generate 58.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hiwin Mikrosystem Corp vs. Globaltek Fabrication Co
Performance |
| Timeline |
| Hiwin Mikrosystem Corp |
| Globaltek Fabrication |
Hiwin Mikrosystem and Globaltek Fabrication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hiwin Mikrosystem and Globaltek Fabrication
The main advantage of trading using opposite Hiwin Mikrosystem and Globaltek Fabrication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hiwin Mikrosystem position performs unexpectedly, Globaltek Fabrication 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 Globaltek Fabrication will offset losses from the drop in Globaltek Fabrication's long position.| Hiwin Mikrosystem vs. Walsin Lihwa Corp | Hiwin Mikrosystem vs. Voltronic Power Technology | Hiwin Mikrosystem vs. Advanced Energy Solution | Hiwin Mikrosystem vs. Simplo Technology Co |
| Globaltek Fabrication vs. SCI Pharmtech | Globaltek Fabrication vs. ZongTai Real Estate | Globaltek Fabrication vs. Ying Han Technology | Globaltek Fabrication vs. Tripod Technology 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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