Correlation Between Coremax Corp and Wafer Works
Can any of the company-specific risk be diversified away by investing in both Coremax Corp and Wafer Works 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 Coremax Corp and Wafer Works into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coremax Corp and Wafer Works, you can compare the effects of market volatilities on Coremax Corp and Wafer Works 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 Coremax Corp with a short position of Wafer Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coremax Corp and Wafer Works.
Diversification Opportunities for Coremax Corp and Wafer Works
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coremax and Wafer is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Coremax Corp and Wafer Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wafer Works and Coremax Corp 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 Coremax Corp are associated (or correlated) with Wafer Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wafer Works has no effect on the direction of Coremax Corp i.e., Coremax Corp and Wafer Works go up and down completely randomly.
Pair Corralation between Coremax Corp and Wafer Works
Assuming the 90 days trading horizon Coremax Corp is expected to under-perform the Wafer Works. In addition to that, Coremax Corp is 1.21 times more volatile than Wafer Works. It trades about -0.04 of its total potential returns per unit of risk. Wafer Works is currently generating about -0.04 per unit of volatility. If you would invest 4,447 in Wafer Works on August 26, 2024 and sell it today you would lose (1,422) from holding Wafer Works or give up 31.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Coremax Corp vs. Wafer Works
Performance |
| Timeline |
| Coremax Corp |
| Wafer Works |
Coremax Corp and Wafer Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coremax Corp and Wafer Works
The main advantage of trading using opposite Coremax Corp and Wafer Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coremax Corp position performs unexpectedly, Wafer Works 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 Wafer Works will offset losses from the drop in Wafer Works' long position.| Coremax Corp vs. Delta Electronics | Coremax Corp vs. China Steel Chemical | Coremax Corp vs. Hota Industrial Mfg | Coremax Corp vs. Ruentex Development Co |
| Wafer Works vs. Sino American Silicon Products | Wafer Works vs. Motech Industries Co | Wafer Works vs. Formosa Sumco Technology | Wafer Works vs. Unimicron 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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