Correlation Between Phoenix Silicon and Global Unichip
Can any of the company-specific risk be diversified away by investing in both Phoenix Silicon and Global Unichip 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 Phoenix Silicon and Global Unichip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix Silicon International and Global Unichip Corp, you can compare the effects of market volatilities on Phoenix Silicon and Global Unichip 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 Phoenix Silicon with a short position of Global Unichip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Silicon and Global Unichip.
Diversification Opportunities for Phoenix Silicon and Global Unichip
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Phoenix and Global is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Silicon International and Global Unichip Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Unichip Corp and Phoenix Silicon 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 Phoenix Silicon International are associated (or correlated) with Global Unichip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Unichip Corp has no effect on the direction of Phoenix Silicon i.e., Phoenix Silicon and Global Unichip go up and down completely randomly.
Pair Corralation between Phoenix Silicon and Global Unichip
Assuming the 90 days trading horizon Phoenix Silicon International is expected to generate 1.3 times more return on investment than Global Unichip. However, Phoenix Silicon is 1.3 times more volatile than Global Unichip Corp. It trades about 0.16 of its potential returns per unit of risk. Global Unichip Corp is currently generating about -0.04 per unit of risk. If you would invest 12,600 in Phoenix Silicon International on August 28, 2024 and sell it today you would earn a total of 1,650 from holding Phoenix Silicon International or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phoenix Silicon International vs. Global Unichip Corp
Performance |
| Timeline |
| Phoenix Silicon Inte |
| Global Unichip Corp |
Phoenix Silicon and Global Unichip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix Silicon and Global Unichip
The main advantage of trading using opposite Phoenix Silicon and Global Unichip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Silicon position performs unexpectedly, Global Unichip 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 Global Unichip will offset losses from the drop in Global Unichip's long position.| Phoenix Silicon vs. Scientech Corp | Phoenix Silicon vs. Sitronix Technology Corp | Phoenix Silicon vs. Kinsus Interconnect Technology | Phoenix Silicon vs. Andes Technology Corp |
| Global Unichip vs. Alchip Technologies | Global Unichip vs. Realtek Semiconductor Corp | Global Unichip vs. Faraday Technology Corp | Global Unichip vs. Novatek Microelectronics 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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