Correlation Between GlobalWafers and Excelliance MOS
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Excelliance MOS 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 Excelliance MOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Excelliance MOS, you can compare the effects of market volatilities on GlobalWafers and Excelliance MOS 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 Excelliance MOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Excelliance MOS.
Diversification Opportunities for GlobalWafers and Excelliance MOS
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GlobalWafers and Excelliance is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Excelliance MOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelliance MOS 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 Excelliance MOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelliance MOS has no effect on the direction of GlobalWafers i.e., GlobalWafers and Excelliance MOS go up and down completely randomly.
Pair Corralation between GlobalWafers and Excelliance MOS
Assuming the 90 days trading horizon GlobalWafers Co is expected to generate 1.06 times more return on investment than Excelliance MOS. However, GlobalWafers is 1.06 times more volatile than Excelliance MOS. It trades about 0.01 of its potential returns per unit of risk. Excelliance MOS is currently generating about -0.02 per unit of risk. If you would invest 43,359 in GlobalWafers Co on August 30, 2024 and sell it today you would lose (1,159) from holding GlobalWafers Co or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalWafers Co vs. Excelliance MOS
Performance |
| Timeline |
| GlobalWafers |
| Excelliance MOS |
GlobalWafers and Excelliance MOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Excelliance MOS
The main advantage of trading using opposite GlobalWafers and Excelliance MOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Excelliance MOS 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 Excelliance MOS will offset losses from the drop in Excelliance MOS's long position.The idea behind GlobalWafers Co and Excelliance MOS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Excelliance MOS vs. Sinopower Semiconductor | Excelliance MOS vs. Niko Semiconductor Co | Excelliance MOS vs. Advanced Power Electronics | Excelliance MOS vs. Anpec Electronics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |