Correlation Between WiseChip Semiconductor and Grand Plastic
Can any of the company-specific risk be diversified away by investing in both WiseChip Semiconductor and Grand Plastic 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 Grand Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseChip Semiconductor and Grand Plastic Technology, you can compare the effects of market volatilities on WiseChip Semiconductor and Grand Plastic 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 Grand Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseChip Semiconductor and Grand Plastic.
Diversification Opportunities for WiseChip Semiconductor and Grand Plastic
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WiseChip and Grand is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding WiseChip Semiconductor and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology 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 Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of WiseChip Semiconductor i.e., WiseChip Semiconductor and Grand Plastic go up and down completely randomly.
Pair Corralation between WiseChip Semiconductor and Grand Plastic
Assuming the 90 days trading horizon WiseChip Semiconductor is expected to under-perform the Grand Plastic. But the stock apears to be less risky and, when comparing its historical volatility, WiseChip Semiconductor is 1.53 times less risky than Grand Plastic. The stock trades about -0.31 of its potential returns per unit of risk. The Grand Plastic Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 169,500 in Grand Plastic Technology on September 4, 2024 and sell it today you would lose (2,500) from holding Grand Plastic Technology or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WiseChip Semiconductor vs. Grand Plastic Technology
Performance |
| Timeline |
| WiseChip Semiconductor |
| Grand Plastic Technology |
WiseChip Semiconductor and Grand Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiseChip Semiconductor and Grand Plastic
The main advantage of trading using opposite WiseChip Semiconductor and Grand Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseChip Semiconductor position performs unexpectedly, Grand Plastic 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 Grand Plastic will offset losses from the drop in Grand Plastic's long position.| WiseChip Semiconductor vs. Taiwan Semiconductor Manufacturing | WiseChip Semiconductor vs. Yang Ming Marine | WiseChip Semiconductor vs. AU Optronics | WiseChip Semiconductor vs. Innolux Corp |
| Grand Plastic vs. CHC Healthcare Group | Grand Plastic vs. GameSparcs Co | Grand Plastic vs. SS Healthcare Holding | Grand Plastic vs. Chinese Gamer 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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