Correlation Between GlobalWafers and Axiomtek
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Axiomtek 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 Axiomtek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Axiomtek Co, you can compare the effects of market volatilities on GlobalWafers and Axiomtek 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 Axiomtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Axiomtek.
Diversification Opportunities for GlobalWafers and Axiomtek
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlobalWafers and Axiomtek is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Axiomtek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiomtek 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 Axiomtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiomtek has no effect on the direction of GlobalWafers i.e., GlobalWafers and Axiomtek go up and down completely randomly.
Pair Corralation between GlobalWafers and Axiomtek
Assuming the 90 days trading horizon GlobalWafers is expected to generate 7.31 times less return on investment than Axiomtek. But when comparing it to its historical volatility, GlobalWafers Co is 1.22 times less risky than Axiomtek. It trades about 0.03 of its potential returns per unit of risk. Axiomtek Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 9,930 in Axiomtek Co on August 27, 2024 and sell it today you would earn a total of 1,070 from holding Axiomtek Co or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalWafers Co vs. Axiomtek Co
Performance |
| Timeline |
| GlobalWafers |
| Axiomtek |
GlobalWafers and Axiomtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Axiomtek
The main advantage of trading using opposite GlobalWafers and Axiomtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Axiomtek 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 Axiomtek will offset losses from the drop in Axiomtek's long position.| GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo Corp |
| Axiomtek vs. Quanta Computer | Axiomtek vs. Wiwynn Corp | Axiomtek vs. Getac Technology Corp | Axiomtek vs. IEI Integration 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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