Correlation Between Wafer Works and Ta Chen
Can any of the company-specific risk be diversified away by investing in both Wafer Works and Ta Chen 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 Wafer Works and Ta Chen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wafer Works and Ta Chen Stainless, you can compare the effects of market volatilities on Wafer Works and Ta Chen 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 Wafer Works with a short position of Ta Chen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wafer Works and Ta Chen.
Diversification Opportunities for Wafer Works and Ta Chen
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wafer and 2027 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wafer Works and Ta Chen Stainless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Chen Stainless and Wafer Works 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 Wafer Works are associated (or correlated) with Ta Chen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Chen Stainless has no effect on the direction of Wafer Works i.e., Wafer Works and Ta Chen go up and down completely randomly.
Pair Corralation between Wafer Works and Ta Chen
Assuming the 90 days trading horizon Wafer Works is expected to under-perform the Ta Chen. But the stock apears to be less risky and, when comparing its historical volatility, Wafer Works is 1.2 times less risky than Ta Chen. The stock trades about -0.02 of its potential returns per unit of risk. The Ta Chen Stainless is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,240 in Ta Chen Stainless on August 26, 2024 and sell it today you would earn a total of 185.00 from holding Ta Chen Stainless or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wafer Works vs. Ta Chen Stainless
Performance |
| Timeline |
| Wafer Works |
| Ta Chen Stainless |
Wafer Works and Ta Chen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wafer Works and Ta Chen
The main advantage of trading using opposite Wafer Works and Ta Chen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wafer Works position performs unexpectedly, Ta Chen 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 Ta Chen will offset losses from the drop in Ta Chen's long position.| Wafer Works vs. Sino American Silicon Products | Wafer Works vs. GlobalWafers Co | Wafer Works vs. Motech Industries Co | Wafer Works vs. Formosa Sumco Technology |
| Ta Chen vs. Chung Hung Steel | Ta Chen vs. China Steel Corp | Ta Chen vs. Tung Ho Steel | Ta Chen vs. Yang Ming Marine |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |