Correlation Between Parade Technologies and WT Microelectronics
Can any of the company-specific risk be diversified away by investing in both Parade Technologies and WT Microelectronics 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 Parade Technologies and WT Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parade Technologies and WT Microelectronics Co, you can compare the effects of market volatilities on Parade Technologies and WT Microelectronics 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 Parade Technologies with a short position of WT Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parade Technologies and WT Microelectronics.
Diversification Opportunities for Parade Technologies and WT Microelectronics
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Parade and 3036 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Parade Technologies and WT Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Microelectronics and Parade Technologies 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 Parade Technologies are associated (or correlated) with WT Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Microelectronics has no effect on the direction of Parade Technologies i.e., Parade Technologies and WT Microelectronics go up and down completely randomly.
Pair Corralation between Parade Technologies and WT Microelectronics
Assuming the 90 days trading horizon Parade Technologies is expected to under-perform the WT Microelectronics. In addition to that, Parade Technologies is 1.14 times more volatile than WT Microelectronics Co. It trades about -0.31 of its total potential returns per unit of risk. WT Microelectronics Co is currently generating about 0.14 per unit of volatility. If you would invest 10,550 in WT Microelectronics Co on October 22, 2024 and sell it today you would earn a total of 500.00 from holding WT Microelectronics Co or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parade Technologies vs. WT Microelectronics Co
Performance |
| Timeline |
| Parade Technologies |
| WT Microelectronics |
Parade Technologies and WT Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parade Technologies and WT Microelectronics
The main advantage of trading using opposite Parade Technologies and WT Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parade Technologies position performs unexpectedly, WT Microelectronics 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 WT Microelectronics will offset losses from the drop in WT Microelectronics' long position.| Parade Technologies vs. Aspeed Technology | Parade Technologies vs. Silergy Corp | Parade Technologies vs. Novatek Microelectronics Corp | Parade Technologies vs. WIN Semiconductors |
| WT Microelectronics vs. WPG Holdings | WT Microelectronics vs. Novatek Microelectronics Corp | WT Microelectronics vs. King Yuan Electronics | WT Microelectronics vs. Synnex Technology International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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