Correlation Between Far EasTone and Winstek Semiconductor
Can any of the company-specific risk be diversified away by investing in both Far EasTone and Winstek Semiconductor 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 Far EasTone and Winstek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Far EasTone Telecommunications and Winstek Semiconductor Co, you can compare the effects of market volatilities on Far EasTone and Winstek Semiconductor 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 Far EasTone with a short position of Winstek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Far EasTone and Winstek Semiconductor.
Diversification Opportunities for Far EasTone and Winstek Semiconductor
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Far and Winstek is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Far EasTone Telecommunications and Winstek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winstek Semiconductor and Far EasTone 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 Far EasTone Telecommunications are associated (or correlated) with Winstek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winstek Semiconductor has no effect on the direction of Far EasTone i.e., Far EasTone and Winstek Semiconductor go up and down completely randomly.
Pair Corralation between Far EasTone and Winstek Semiconductor
Assuming the 90 days trading horizon Far EasTone Telecommunications is expected to generate 0.35 times more return on investment than Winstek Semiconductor. However, Far EasTone Telecommunications is 2.85 times less risky than Winstek Semiconductor. It trades about -0.02 of its potential returns per unit of risk. Winstek Semiconductor Co is currently generating about -0.14 per unit of risk. If you would invest 8,950 in Far EasTone Telecommunications on October 21, 2024 and sell it today you would lose (40.00) from holding Far EasTone Telecommunications or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Far EasTone Telecommunications vs. Winstek Semiconductor Co
Performance |
| Timeline |
| Far EasTone Telecomm |
| Winstek Semiconductor |
Far EasTone and Winstek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Far EasTone and Winstek Semiconductor
The main advantage of trading using opposite Far EasTone and Winstek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Far EasTone position performs unexpectedly, Winstek Semiconductor 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 Winstek Semiconductor will offset losses from the drop in Winstek Semiconductor's long position.| Far EasTone vs. Taiwan Mobile Co | Far EasTone vs. Chunghwa Telecom Co | Far EasTone vs. President Chain Store | Far EasTone vs. Formosa Petrochemical Corp |
| Winstek Semiconductor vs. PChome Online | Winstek Semiconductor vs. K Way Information | Winstek Semiconductor vs. Information Technology Total | Winstek Semiconductor vs. Provision Information CoLtd |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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