Correlation Between GlobalWafers and Parade Technologies
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Parade Technologies 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 Parade Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Parade Technologies, you can compare the effects of market volatilities on GlobalWafers and Parade Technologies 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 Parade Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Parade Technologies.
Diversification Opportunities for GlobalWafers and Parade Technologies
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GlobalWafers and Parade is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Parade Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parade Technologies 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 Parade Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parade Technologies has no effect on the direction of GlobalWafers i.e., GlobalWafers and Parade Technologies go up and down completely randomly.
Pair Corralation between GlobalWafers and Parade Technologies
Assuming the 90 days trading horizon GlobalWafers Co is expected to under-perform the Parade Technologies. But the stock apears to be less risky and, when comparing its historical volatility, GlobalWafers Co is 1.31 times less risky than Parade Technologies. The stock trades about -0.11 of its potential returns per unit of risk. The Parade Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 74,200 in Parade Technologies on September 13, 2024 and sell it today you would earn a total of 100.00 from holding Parade Technologies or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalWafers Co vs. Parade Technologies
Performance |
| Timeline |
| GlobalWafers |
| Parade Technologies |
GlobalWafers and Parade Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Parade Technologies
The main advantage of trading using opposite GlobalWafers and Parade Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Parade Technologies 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 Parade Technologies will offset losses from the drop in Parade Technologies' long position.| GlobalWafers vs. AU Optronics | GlobalWafers vs. Innolux Corp | GlobalWafers vs. Ruentex Development Co | GlobalWafers vs. WiseChip Semiconductor |
| Parade Technologies vs. WIN Semiconductors | Parade Technologies vs. GlobalWafers Co | Parade Technologies vs. Novatek Microelectronics Corp | Parade Technologies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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