Correlation Between GlobalWafers and WiseChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and WiseChip Semiconductor 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 WiseChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and WiseChip Semiconductor, you can compare the effects of market volatilities on GlobalWafers and WiseChip Semiconductor 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 WiseChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and WiseChip Semiconductor.
Diversification Opportunities for GlobalWafers and WiseChip Semiconductor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlobalWafers and WiseChip is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and WiseChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiseChip Semiconductor 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 WiseChip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiseChip Semiconductor has no effect on the direction of GlobalWafers i.e., GlobalWafers and WiseChip Semiconductor go up and down completely randomly.
Pair Corralation between GlobalWafers and WiseChip Semiconductor
Assuming the 90 days trading horizon GlobalWafers Co is expected to generate 0.84 times more return on investment than WiseChip Semiconductor. However, GlobalWafers Co is 1.19 times less risky than WiseChip Semiconductor. It trades about 0.01 of its potential returns per unit of risk. WiseChip Semiconductor is currently generating about -0.02 per unit of risk. If you would invest 40,783 in GlobalWafers Co on September 13, 2024 and sell it today you would lose (183.00) from holding GlobalWafers Co or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalWafers Co vs. WiseChip Semiconductor
Performance |
| Timeline |
| GlobalWafers |
| WiseChip Semiconductor |
GlobalWafers and WiseChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and WiseChip Semiconductor
The main advantage of trading using opposite GlobalWafers and WiseChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, WiseChip Semiconductor 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 WiseChip Semiconductor will offset losses from the drop in WiseChip Semiconductor's long position.| GlobalWafers vs. AU Optronics | GlobalWafers vs. Innolux Corp | GlobalWafers vs. Ruentex Development Co | GlobalWafers vs. WiseChip Semiconductor |
| WiseChip Semiconductor vs. AU Optronics | WiseChip Semiconductor vs. Innolux Corp | WiseChip Semiconductor vs. Ruentex Development Co | WiseChip Semiconductor 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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