Correlation Between WiseChip Semiconductor and Shuang Bang
Can any of the company-specific risk be diversified away by investing in both WiseChip Semiconductor and Shuang Bang 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 Shuang Bang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseChip Semiconductor and Shuang Bang Industrial, you can compare the effects of market volatilities on WiseChip Semiconductor and Shuang Bang 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 Shuang Bang. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseChip Semiconductor and Shuang Bang.
Diversification Opportunities for WiseChip Semiconductor and Shuang Bang
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WiseChip and Shuang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding WiseChip Semiconductor and Shuang Bang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuang Bang Industrial 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 Shuang Bang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuang Bang Industrial has no effect on the direction of WiseChip Semiconductor i.e., WiseChip Semiconductor and Shuang Bang go up and down completely randomly.
Pair Corralation between WiseChip Semiconductor and Shuang Bang
Assuming the 90 days trading horizon WiseChip Semiconductor is expected to under-perform the Shuang Bang. But the stock apears to be less risky and, when comparing its historical volatility, WiseChip Semiconductor is 1.2 times less risky than Shuang Bang. The stock trades about -0.04 of its potential returns per unit of risk. The Shuang Bang Industrial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,715 in Shuang Bang Industrial on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Shuang Bang Industrial or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
WiseChip Semiconductor vs. Shuang Bang Industrial
Performance |
| Timeline |
| WiseChip Semiconductor |
| Shuang Bang Industrial |
WiseChip Semiconductor and Shuang Bang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiseChip Semiconductor and Shuang Bang
The main advantage of trading using opposite WiseChip Semiconductor and Shuang Bang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseChip Semiconductor position performs unexpectedly, Shuang Bang 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 Shuang Bang will offset losses from the drop in Shuang Bang'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 |
| Shuang Bang vs. Delta Electronics | Shuang Bang vs. Ruentex Development Co | Shuang Bang vs. WiseChip Semiconductor | Shuang Bang vs. Novatek Microelectronics Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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