Correlation Between GlobalWafers and Integrated Service
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Integrated Service 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 Integrated Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Integrated Service Technology, you can compare the effects of market volatilities on GlobalWafers and Integrated Service 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 Integrated Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Integrated Service.
Diversification Opportunities for GlobalWafers and Integrated Service
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlobalWafers and Integrated is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service 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 Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of GlobalWafers i.e., GlobalWafers and Integrated Service go up and down completely randomly.
Pair Corralation between GlobalWafers and Integrated Service
Assuming the 90 days trading horizon GlobalWafers Co is expected to generate 0.7 times more return on investment than Integrated Service. However, GlobalWafers Co is 1.42 times less risky than Integrated Service. It trades about 0.03 of its potential returns per unit of risk. Integrated Service Technology is currently generating about -0.33 per unit of risk. If you would invest 43,000 in GlobalWafers Co on August 28, 2024 and sell it today you would earn a total of 450.00 from holding GlobalWafers Co or generate 1.05% 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. Integrated Service Technology
Performance |
| Timeline |
| GlobalWafers |
| Integrated Service |
GlobalWafers and Integrated Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Integrated Service
The main advantage of trading using opposite GlobalWafers and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Integrated Service 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 Integrated Service will offset losses from the drop in Integrated Service's long position.| GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo Corp |
| Integrated Service vs. Global Unichip Corp | Integrated Service vs. Asmedia Technology | Integrated Service vs. Unimicron Technology Corp | Integrated Service vs. Novatek Microelectronics 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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