Correlation Between GlobalWafers and Advanced Wireless
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Advanced Wireless 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 Advanced Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Advanced Wireless Semiconductor, you can compare the effects of market volatilities on GlobalWafers and Advanced Wireless 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 Advanced Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Advanced Wireless.
Diversification Opportunities for GlobalWafers and Advanced Wireless
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlobalWafers and Advanced is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Advanced Wireless Semiconducto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Wireless 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 Advanced Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Wireless has no effect on the direction of GlobalWafers i.e., GlobalWafers and Advanced Wireless go up and down completely randomly.
Pair Corralation between GlobalWafers and Advanced Wireless
Assuming the 90 days trading horizon GlobalWafers Co is expected to under-perform the Advanced Wireless. But the stock apears to be less risky and, when comparing its historical volatility, GlobalWafers Co is 1.45 times less risky than Advanced Wireless. The stock trades about -0.14 of its potential returns per unit of risk. The Advanced Wireless Semiconductor is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 10,300 in Advanced Wireless Semiconductor on October 20, 2024 and sell it today you would lose (400.00) from holding Advanced Wireless Semiconductor or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlobalWafers Co vs. Advanced Wireless Semiconducto
Performance |
| Timeline |
| GlobalWafers |
| Advanced Wireless |
GlobalWafers and Advanced Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalWafers and Advanced Wireless
The main advantage of trading using opposite GlobalWafers and Advanced Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Advanced Wireless 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 Advanced Wireless will offset losses from the drop in Advanced Wireless' long position.| GlobalWafers vs. ASRock Inc | GlobalWafers vs. FIC Global | GlobalWafers vs. In Win Development | GlobalWafers vs. Getac Technology Corp |
| Advanced Wireless vs. WIN Semiconductors | Advanced Wireless vs. Visual Photonics Epitaxy | Advanced Wireless vs. GlobalWafers Co | Advanced Wireless 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |