Correlation Between Sunfar Computer and Winstek Semiconductor
Can any of the company-specific risk be diversified away by investing in both Sunfar Computer and Winstek Semiconductor 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 Sunfar Computer and Winstek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunfar Computer Co and Winstek Semiconductor Co, you can compare the effects of market volatilities on Sunfar Computer and Winstek Semiconductor 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 Sunfar Computer with a short position of Winstek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunfar Computer and Winstek Semiconductor.
Diversification Opportunities for Sunfar Computer and Winstek Semiconductor
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunfar and Winstek is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sunfar Computer Co and Winstek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winstek Semiconductor and Sunfar Computer 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 Sunfar Computer Co are associated (or correlated) with Winstek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winstek Semiconductor has no effect on the direction of Sunfar Computer i.e., Sunfar Computer and Winstek Semiconductor go up and down completely randomly.
Pair Corralation between Sunfar Computer and Winstek Semiconductor
Assuming the 90 days trading horizon Sunfar Computer is expected to generate 10.89 times less return on investment than Winstek Semiconductor. But when comparing it to its historical volatility, Sunfar Computer Co is 4.17 times less risky than Winstek Semiconductor. It trades about 0.02 of its potential returns per unit of risk. Winstek Semiconductor Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,800 in Winstek Semiconductor Co on September 12, 2024 and sell it today you would earn a total of 700.00 from holding Winstek Semiconductor Co or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunfar Computer Co vs. Winstek Semiconductor Co
Performance |
| Timeline |
| Sunfar Computer |
| Winstek Semiconductor |
Sunfar Computer and Winstek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunfar Computer and Winstek Semiconductor
The main advantage of trading using opposite Sunfar Computer and Winstek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunfar Computer position performs unexpectedly, Winstek Semiconductor 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 Winstek Semiconductor will offset losses from the drop in Winstek Semiconductor's long position.| Sunfar Computer vs. Auras Technology Co | Sunfar Computer vs. Forcecon Technology Co | Sunfar Computer vs. TUL Corporation | Sunfar Computer vs. Space Shuttle Hi Tech |
| Winstek Semiconductor vs. Dynamic Medical Technologies | Winstek Semiconductor vs. Cameo Communications | Winstek Semiconductor vs. Hsin Kuang Steel | Winstek Semiconductor vs. Far EasTone Telecommunications |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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