Correlation Between Chicony Power and WiseChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Chicony Power and WiseChip 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 Chicony Power and WiseChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicony Power Technology and WiseChip Semiconductor, you can compare the effects of market volatilities on Chicony Power and WiseChip 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 Chicony Power with a short position of WiseChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Power and WiseChip Semiconductor.
Diversification Opportunities for Chicony Power and WiseChip Semiconductor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chicony and WiseChip is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Power Technology and WiseChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiseChip Semiconductor and Chicony Power 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 Chicony Power Technology are associated (or correlated) with WiseChip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiseChip Semiconductor has no effect on the direction of Chicony Power i.e., Chicony Power and WiseChip Semiconductor go up and down completely randomly.
Pair Corralation between Chicony Power and WiseChip Semiconductor
Assuming the 90 days trading horizon Chicony Power Technology is expected to generate 1.13 times more return on investment than WiseChip Semiconductor. However, Chicony Power is 1.13 times more volatile than WiseChip Semiconductor. It trades about 0.03 of its potential returns per unit of risk. WiseChip Semiconductor is currently generating about -0.31 per unit of risk. If you would invest 12,650 in Chicony Power Technology on September 4, 2024 and sell it today you would earn a total of 100.00 from holding Chicony Power Technology or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Power Technology vs. WiseChip Semiconductor
Performance |
| Timeline |
| Chicony Power Technology |
| WiseChip Semiconductor |
Chicony Power and WiseChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Power and WiseChip Semiconductor
The main advantage of trading using opposite Chicony Power and WiseChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Power position performs unexpectedly, WiseChip 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 WiseChip Semiconductor will offset losses from the drop in WiseChip Semiconductor's long position.| Chicony Power vs. WiseChip Semiconductor | Chicony Power vs. Novatek Microelectronics Corp | Chicony Power vs. Leader Electronics | Chicony Power vs. Information Technology Total |
| WiseChip Semiconductor vs. Taiwan Semiconductor Manufacturing | WiseChip Semiconductor vs. Yang Ming Marine | WiseChip Semiconductor vs. AU Optronics | WiseChip Semiconductor vs. Innolux 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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