Correlation Between WiseChip Semiconductor and Gem Terminal
Can any of the company-specific risk be diversified away by investing in both WiseChip Semiconductor and Gem Terminal 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 Gem Terminal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseChip Semiconductor and Gem Terminal Industry, you can compare the effects of market volatilities on WiseChip Semiconductor and Gem Terminal 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 Gem Terminal. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseChip Semiconductor and Gem Terminal.
Diversification Opportunities for WiseChip Semiconductor and Gem Terminal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WiseChip and Gem is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding WiseChip Semiconductor and Gem Terminal Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gem Terminal Industry 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 Gem Terminal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gem Terminal Industry has no effect on the direction of WiseChip Semiconductor i.e., WiseChip Semiconductor and Gem Terminal go up and down completely randomly.
Pair Corralation between WiseChip Semiconductor and Gem Terminal
Assuming the 90 days trading horizon WiseChip Semiconductor is expected to under-perform the Gem Terminal. But the stock apears to be less risky and, when comparing its historical volatility, WiseChip Semiconductor is 1.34 times less risky than Gem Terminal. The stock trades about -0.02 of its potential returns per unit of risk. The Gem Terminal Industry is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,415 in Gem Terminal Industry on September 12, 2024 and sell it today you would earn a total of 225.00 from holding Gem Terminal Industry or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WiseChip Semiconductor vs. Gem Terminal Industry
Performance |
| Timeline |
| WiseChip Semiconductor |
| Gem Terminal Industry |
WiseChip Semiconductor and Gem Terminal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiseChip Semiconductor and Gem Terminal
The main advantage of trading using opposite WiseChip Semiconductor and Gem Terminal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseChip Semiconductor position performs unexpectedly, Gem Terminal 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 Gem Terminal will offset losses from the drop in Gem Terminal's long position.| WiseChip Semiconductor vs. AU Optronics | WiseChip Semiconductor vs. Innolux Corp | WiseChip Semiconductor vs. Ruentex Development Co | WiseChip Semiconductor vs. Novatek Microelectronics Corp |
| Gem Terminal vs. Zinwell | Gem Terminal vs. K Laser Technology | Gem Terminal vs. Ichia Technologies | Gem Terminal vs. AVerMedia Technologies |
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 CEOs Directory module to screen CEOs from public companies around the world.
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