Correlation Between Chia Chang and Winstek Semiconductor
Can any of the company-specific risk be diversified away by investing in both Chia Chang 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 Chia Chang and Winstek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia Chang Co and Winstek Semiconductor Co, you can compare the effects of market volatilities on Chia Chang 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 Chia Chang with a short position of Winstek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia Chang and Winstek Semiconductor.
Diversification Opportunities for Chia Chang and Winstek Semiconductor
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chia and Winstek is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Chia Chang Co and Winstek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winstek Semiconductor and Chia Chang 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 Chia Chang Co 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 Chia Chang i.e., Chia Chang and Winstek Semiconductor go up and down completely randomly.
Pair Corralation between Chia Chang and Winstek Semiconductor
Assuming the 90 days trading horizon Chia Chang Co is expected to generate 0.53 times more return on investment than Winstek Semiconductor. However, Chia Chang Co is 1.89 times less risky than Winstek Semiconductor. It trades about -0.01 of its potential returns per unit of risk. Winstek Semiconductor Co is currently generating about -0.03 per unit of risk. If you would invest 4,115 in Chia Chang Co on October 10, 2024 and sell it today you would lose (10.00) from holding Chia Chang Co or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chia Chang Co vs. Winstek Semiconductor Co
Performance |
| Timeline |
| Chia Chang |
| Winstek Semiconductor |
Chia Chang and Winstek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia Chang and Winstek Semiconductor
The main advantage of trading using opposite Chia Chang and Winstek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia Chang 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.| Chia Chang vs. FSP Technology | Chia Chang vs. HannStar Board Corp | Chia Chang vs. Taiwan Surface Mounting | Chia Chang vs. Emerging Display Technologies |
| Winstek Semiconductor vs. Pacific Hospital Supply | Winstek Semiconductor vs. Chi Hua Fitness | Winstek Semiconductor vs. SS Healthcare Holding | Winstek Semiconductor vs. Onyx Healthcare |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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