Correlation Between GlobalWafers and Sunnic Technology
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Sunnic Technology 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 Sunnic Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Sunnic Technology Merchandise, you can compare the effects of market volatilities on GlobalWafers and Sunnic Technology 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 Sunnic Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Sunnic Technology.
Diversification Opportunities for GlobalWafers and Sunnic Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlobalWafers and Sunnic is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Sunnic Technology Merchandise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunnic Technology 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 Sunnic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunnic Technology has no effect on the direction of GlobalWafers i.e., GlobalWafers and Sunnic Technology go up and down completely randomly.
Pair Corralation between GlobalWafers and Sunnic Technology
Assuming the 90 days trading horizon GlobalWafers is expected to generate 5.1 times less return on investment than Sunnic Technology. But when comparing it to its historical volatility, GlobalWafers Co is 1.47 times less risky than Sunnic Technology. It trades about 0.01 of its potential returns per unit of risk. Sunnic Technology Merchandise is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,268 in Sunnic Technology Merchandise on September 13, 2024 and sell it today you would earn a total of 272.00 from holding Sunnic Technology Merchandise or generate 21.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalWafers Co vs. Sunnic Technology Merchandise
Performance |
| Timeline |
| GlobalWafers |
| Sunnic Technology |
GlobalWafers and Sunnic Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Sunnic Technology
The main advantage of trading using opposite GlobalWafers and Sunnic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Sunnic Technology 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 Sunnic Technology will offset losses from the drop in Sunnic Technology's long position.| GlobalWafers vs. AU Optronics | GlobalWafers vs. Innolux Corp | GlobalWafers vs. Ruentex Development Co | GlobalWafers vs. WiseChip Semiconductor |
| Sunnic Technology vs. WIN Semiconductors | Sunnic Technology vs. GlobalWafers Co | Sunnic Technology vs. Novatek Microelectronics Corp | Sunnic Technology vs. Ruentex Development Co |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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