Correlation Between WiseChip Semiconductor and Feng Ching
Can any of the company-specific risk be diversified away by investing in both WiseChip Semiconductor and Feng Ching 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 WiseChip Semiconductor and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseChip Semiconductor and Feng Ching Metal, you can compare the effects of market volatilities on WiseChip Semiconductor and Feng Ching 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 WiseChip Semiconductor with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseChip Semiconductor and Feng Ching.
Diversification Opportunities for WiseChip Semiconductor and Feng Ching
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WiseChip and Feng is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding WiseChip Semiconductor and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and WiseChip Semiconductor 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 WiseChip Semiconductor are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of WiseChip Semiconductor i.e., WiseChip Semiconductor and Feng Ching go up and down completely randomly.
Pair Corralation between WiseChip Semiconductor and Feng Ching
Assuming the 90 days trading horizon WiseChip Semiconductor is expected to under-perform the Feng Ching. But the stock apears to be less risky and, when comparing its historical volatility, WiseChip Semiconductor is 1.48 times less risky than Feng Ching. The stock trades about -0.02 of its potential returns per unit of risk. The Feng Ching Metal is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,565 in Feng Ching Metal on September 4, 2024 and sell it today you would earn a total of 350.00 from holding Feng Ching Metal or generate 22.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WiseChip Semiconductor vs. Feng Ching Metal
Performance |
| Timeline |
| WiseChip Semiconductor |
| Feng Ching Metal |
WiseChip Semiconductor and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiseChip Semiconductor and Feng Ching
The main advantage of trading using opposite WiseChip Semiconductor and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseChip Semiconductor position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.| WiseChip Semiconductor vs. Taiwan Semiconductor Manufacturing | WiseChip Semiconductor vs. Yang Ming Marine | WiseChip Semiconductor vs. ASE Industrial Holding | WiseChip Semiconductor vs. AU Optronics |
| Feng Ching vs. Eclat Textile Co | Feng Ching vs. WiseChip Semiconductor | Feng Ching vs. Novatek Microelectronics Corp | Feng Ching vs. Leader Electronics |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |