Correlation Between WiseChip Semiconductor and Kedge Construction
Can any of the company-specific risk be diversified away by investing in both WiseChip Semiconductor and Kedge Construction 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 Kedge Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseChip Semiconductor and Kedge Construction Co, you can compare the effects of market volatilities on WiseChip Semiconductor and Kedge Construction 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 Kedge Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseChip Semiconductor and Kedge Construction.
Diversification Opportunities for WiseChip Semiconductor and Kedge Construction
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between WiseChip and Kedge is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding WiseChip Semiconductor and Kedge Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedge Construction 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 Kedge Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedge Construction has no effect on the direction of WiseChip Semiconductor i.e., WiseChip Semiconductor and Kedge Construction go up and down completely randomly.
Pair Corralation between WiseChip Semiconductor and Kedge Construction
Assuming the 90 days trading horizon WiseChip Semiconductor is expected to under-perform the Kedge Construction. In addition to that, WiseChip Semiconductor is 1.11 times more volatile than Kedge Construction Co. It trades about -0.04 of its total potential returns per unit of risk. Kedge Construction Co is currently generating about 0.06 per unit of volatility. If you would invest 4,810 in Kedge Construction Co on September 5, 2024 and sell it today you would earn a total of 2,720 from holding Kedge Construction Co or generate 56.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WiseChip Semiconductor vs. Kedge Construction Co
Performance |
| Timeline |
| WiseChip Semiconductor |
| Kedge Construction |
WiseChip Semiconductor and Kedge Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiseChip Semiconductor and Kedge Construction
The main advantage of trading using opposite WiseChip Semiconductor and Kedge Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseChip Semiconductor position performs unexpectedly, Kedge Construction 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 Kedge Construction will offset losses from the drop in Kedge Construction's long position.| WiseChip Semiconductor vs. Taiwan Semiconductor Manufacturing | WiseChip Semiconductor vs. Yang Ming Marine | WiseChip Semiconductor vs. AU Optronics | WiseChip Semiconductor vs. Nan Ya Plastics |
| Kedge Construction vs. Universal Microelectronics Co | Kedge Construction vs. AVerMedia Technologies | Kedge Construction vs. Symtek Automation Asia | Kedge Construction vs. WiseChip Semiconductor |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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