Correlation Between GlobalWafers and Visual Photonics
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Visual Photonics 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 GlobalWafers and Visual Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Visual Photonics Epitaxy, you can compare the effects of market volatilities on GlobalWafers and Visual Photonics 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 GlobalWafers with a short position of Visual Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Visual Photonics.
Diversification Opportunities for GlobalWafers and Visual Photonics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlobalWafers and Visual is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Visual Photonics Epitaxy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visual Photonics Epitaxy and GlobalWafers 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 GlobalWafers Co are associated (or correlated) with Visual Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visual Photonics Epitaxy has no effect on the direction of GlobalWafers i.e., GlobalWafers and Visual Photonics go up and down completely randomly.
Pair Corralation between GlobalWafers and Visual Photonics
Assuming the 90 days trading horizon GlobalWafers Co is expected to under-perform the Visual Photonics. But the stock apears to be less risky and, when comparing its historical volatility, GlobalWafers Co is 1.52 times less risky than Visual Photonics. The stock trades about -0.16 of its potential returns per unit of risk. The Visual Photonics Epitaxy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 14,600 in Visual Photonics Epitaxy on October 25, 2024 and sell it today you would earn a total of 1,800 from holding Visual Photonics Epitaxy or generate 12.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalWafers Co vs. Visual Photonics Epitaxy
Performance |
| Timeline |
| GlobalWafers |
| Visual Photonics Epitaxy |
GlobalWafers and Visual Photonics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Visual Photonics
The main advantage of trading using opposite GlobalWafers and Visual Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Visual Photonics 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 Visual Photonics will offset losses from the drop in Visual Photonics' long position.| GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo Corp |
| Visual Photonics vs. WIN Semiconductors | Visual Photonics vs. Advanced Wireless Semiconductor | Visual Photonics vs. Elan Microelectronics Corp | Visual Photonics vs. King Yuan Electronics |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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