Correlation Between Tong Hsing and Winstek Semiconductor
Can any of the company-specific risk be diversified away by investing in both Tong Hsing 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 Tong Hsing and Winstek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tong Hsing Electronic and Winstek Semiconductor Co, you can compare the effects of market volatilities on Tong Hsing 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 Tong Hsing with a short position of Winstek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tong Hsing and Winstek Semiconductor.
Diversification Opportunities for Tong Hsing and Winstek Semiconductor
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tong and Winstek is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tong Hsing Electronic and Winstek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winstek Semiconductor and Tong Hsing 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 Tong Hsing Electronic 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 Tong Hsing i.e., Tong Hsing and Winstek Semiconductor go up and down completely randomly.
Pair Corralation between Tong Hsing and Winstek Semiconductor
Assuming the 90 days trading horizon Tong Hsing Electronic is expected to under-perform the Winstek Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Tong Hsing Electronic is 1.48 times less risky than Winstek Semiconductor. The stock trades about -0.06 of its potential returns per unit of risk. The Winstek Semiconductor Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,550 in Winstek Semiconductor Co on October 26, 2024 and sell it today you would earn a total of 500.00 from holding Winstek Semiconductor Co or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tong Hsing Electronic vs. Winstek Semiconductor Co
Performance |
| Timeline |
| Tong Hsing Electronic |
| Winstek Semiconductor |
Tong Hsing and Winstek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tong Hsing and Winstek Semiconductor
The main advantage of trading using opposite Tong Hsing and Winstek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tong Hsing 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.| Tong Hsing vs. Kinsus Interconnect Technology | Tong Hsing vs. Unimicron Technology Corp | Tong Hsing vs. Nan Ya Printed | Tong Hsing vs. WIN Semiconductors |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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