Correlation Between VIA Labs and Orient Semiconductor
Can any of the company-specific risk be diversified away by investing in both VIA Labs and Orient 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 VIA Labs and Orient Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIA Labs and Orient Semiconductor Electronics, you can compare the effects of market volatilities on VIA Labs and Orient 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 VIA Labs with a short position of Orient Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIA Labs and Orient Semiconductor.
Diversification Opportunities for VIA Labs and Orient Semiconductor
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VIA and Orient is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding VIA Labs and Orient Semiconductor Electroni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Semiconductor and VIA Labs 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 VIA Labs are associated (or correlated) with Orient Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Semiconductor has no effect on the direction of VIA Labs i.e., VIA Labs and Orient Semiconductor go up and down completely randomly.
Pair Corralation between VIA Labs and Orient Semiconductor
Assuming the 90 days trading horizon VIA Labs is expected to under-perform the Orient Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, VIA Labs is 1.2 times less risky than Orient Semiconductor. The stock trades about -0.01 of its potential returns per unit of risk. The Orient Semiconductor Electronics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,760 in Orient Semiconductor Electronics on September 13, 2024 and sell it today you would earn a total of 1,830 from holding Orient Semiconductor Electronics or generate 103.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIA Labs vs. Orient Semiconductor Electroni
Performance |
| Timeline |
| VIA Labs |
| Orient Semiconductor |
VIA Labs and Orient Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIA Labs and Orient Semiconductor
The main advantage of trading using opposite VIA Labs and Orient Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIA Labs position performs unexpectedly, Orient 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 Orient Semiconductor will offset losses from the drop in Orient Semiconductor's long position.| VIA Labs vs. Asmedia Technology | VIA Labs vs. Global Unichip Corp | VIA Labs vs. Alchip Technologies | VIA Labs vs. Kinsus Interconnect Technology |
| Orient Semiconductor vs. AU Optronics | Orient Semiconductor vs. Innolux Corp | Orient Semiconductor vs. Ruentex Development Co | Orient Semiconductor vs. WiseChip Semiconductor |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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