Correlation Between GlobalWafers and Green World
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Green World 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 Green World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Green World Fintech, you can compare the effects of market volatilities on GlobalWafers and Green World 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 Green World. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Green World.
Diversification Opportunities for GlobalWafers and Green World
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GlobalWafers and Green is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Green World Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green World Fintech 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 Green World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green World Fintech has no effect on the direction of GlobalWafers i.e., GlobalWafers and Green World go up and down completely randomly.
Pair Corralation between GlobalWafers and Green World
Assuming the 90 days trading horizon GlobalWafers Co is expected to under-perform the Green World. But the stock apears to be less risky and, when comparing its historical volatility, GlobalWafers Co is 2.05 times less risky than Green World. The stock trades about -0.05 of its potential returns per unit of risk. The Green World Fintech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,983 in Green World Fintech on September 3, 2024 and sell it today you would earn a total of 3,937 from holding Green World Fintech or generate 131.98% 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. Green World Fintech
Performance |
| Timeline |
| GlobalWafers |
| Green World Fintech |
GlobalWafers and Green World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Green World
The main advantage of trading using opposite GlobalWafers and Green World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Green World 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 Green World will offset losses from the drop in Green World's long position.| GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo Corp |
| Green World vs. Wistron Information Technology | Green World vs. BRIM Biotechnology | Green World vs. Quanta Storage | Green World vs. Mercuries Data Systems |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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