Correlation Between Wistron NeWeb and Kinsus Interconnect
Can any of the company-specific risk be diversified away by investing in both Wistron NeWeb and Kinsus Interconnect 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 Wistron NeWeb and Kinsus Interconnect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wistron NeWeb Corp and Kinsus Interconnect Technology, you can compare the effects of market volatilities on Wistron NeWeb and Kinsus Interconnect 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 Wistron NeWeb with a short position of Kinsus Interconnect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron NeWeb and Kinsus Interconnect.
Diversification Opportunities for Wistron NeWeb and Kinsus Interconnect
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wistron and Kinsus is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Wistron NeWeb Corp and Kinsus Interconnect Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsus Interconnect and Wistron NeWeb 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 Wistron NeWeb Corp are associated (or correlated) with Kinsus Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsus Interconnect has no effect on the direction of Wistron NeWeb i.e., Wistron NeWeb and Kinsus Interconnect go up and down completely randomly.
Pair Corralation between Wistron NeWeb and Kinsus Interconnect
Assuming the 90 days trading horizon Wistron NeWeb Corp is expected to generate 1.03 times more return on investment than Kinsus Interconnect. However, Wistron NeWeb is 1.03 times more volatile than Kinsus Interconnect Technology. It trades about 0.04 of its potential returns per unit of risk. Kinsus Interconnect Technology is currently generating about -0.01 per unit of risk. If you would invest 8,670 in Wistron NeWeb Corp on August 30, 2024 and sell it today you would earn a total of 2,930 from holding Wistron NeWeb Corp or generate 33.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron NeWeb Corp vs. Kinsus Interconnect Technology
Performance |
| Timeline |
| Wistron NeWeb Corp |
| Kinsus Interconnect |
Wistron NeWeb and Kinsus Interconnect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron NeWeb and Kinsus Interconnect
The main advantage of trading using opposite Wistron NeWeb and Kinsus Interconnect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron NeWeb position performs unexpectedly, Kinsus Interconnect 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 Kinsus Interconnect will offset losses from the drop in Kinsus Interconnect's long position.| Wistron NeWeb vs. Maxigen Biotech | Wistron NeWeb vs. Wistron Information Technology | Wistron NeWeb vs. Ichia Technologies | Wistron NeWeb vs. Univacco Technology |
| Kinsus Interconnect vs. Unimicron Technology Corp | Kinsus Interconnect vs. Nan Ya Printed | Kinsus Interconnect vs. Novatek Microelectronics Corp | Kinsus Interconnect vs. Powertech Technology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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