Correlation Between GlobalWafers and Acter
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Acter 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 Acter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Acter Co, you can compare the effects of market volatilities on GlobalWafers and Acter 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 Acter. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Acter.
Diversification Opportunities for GlobalWafers and Acter
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlobalWafers and Acter is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Acter Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acter 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 Acter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acter has no effect on the direction of GlobalWafers i.e., GlobalWafers and Acter go up and down completely randomly.
Pair Corralation between GlobalWafers and Acter
Assuming the 90 days trading horizon GlobalWafers Co is expected to under-perform the Acter. But the stock apears to be less risky and, when comparing its historical volatility, GlobalWafers Co is 1.55 times less risky than Acter. The stock trades about -0.07 of its potential returns per unit of risk. The Acter Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 30,700 in Acter Co on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Acter Co or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalWafers Co vs. Acter Co
Performance |
| Timeline |
| GlobalWafers |
| Acter |
GlobalWafers and Acter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Acter
The main advantage of trading using opposite GlobalWafers and Acter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Acter 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 Acter will offset losses from the drop in Acter's long position.| GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Sitronix Technology Corp | GlobalWafers vs. Elan Microelectronics Corp | GlobalWafers vs. Global Unichip Corp |
| Acter vs. United Integrated Services | Acter vs. Topco Scientific Co | Acter vs. Nova Technology | Acter vs. Simplo Technology 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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