Correlation Between GlobalWafers and Syntek Semiconductor
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Syntek 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 Syntek 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 Syntek Semiconductor Co, you can compare the effects of market volatilities on GlobalWafers and Syntek 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 Syntek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Syntek Semiconductor.
Diversification Opportunities for GlobalWafers and Syntek Semiconductor
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GlobalWafers and Syntek is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Syntek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syntek 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 Syntek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syntek Semiconductor has no effect on the direction of GlobalWafers i.e., GlobalWafers and Syntek Semiconductor go up and down completely randomly.
Pair Corralation between GlobalWafers and Syntek Semiconductor
Assuming the 90 days trading horizon GlobalWafers Co is expected to under-perform the Syntek Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, GlobalWafers Co is 1.36 times less risky than Syntek Semiconductor. The stock trades about -0.26 of its potential returns per unit of risk. The Syntek Semiconductor Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,065 in Syntek Semiconductor Co on October 26, 2024 and sell it today you would lose (81.00) from holding Syntek Semiconductor Co or give up 7.61% 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. Syntek Semiconductor Co
Performance |
| Timeline |
| GlobalWafers |
| Syntek Semiconductor |
GlobalWafers and Syntek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Syntek Semiconductor
The main advantage of trading using opposite GlobalWafers and Syntek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Syntek 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 Syntek Semiconductor will offset losses from the drop in Syntek Semiconductor's long position.| GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo Corp |
| Syntek Semiconductor vs. WIN Semiconductors | Syntek Semiconductor vs. Visual Photonics Epitaxy | Syntek Semiconductor vs. GlobalWafers Co | Syntek Semiconductor vs. Unimicron Technology 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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