Correlation Between Nan Ya and Global Unichip
Can any of the company-specific risk be diversified away by investing in both Nan Ya 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 Nan Ya and Global Unichip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Ya Printed and Global Unichip Corp, you can compare the effects of market volatilities on Nan Ya 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 Nan Ya with a short position of Global Unichip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Global Unichip.
Diversification Opportunities for Nan Ya and Global Unichip
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nan and Global is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Printed 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 Nan Ya 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 Nan Ya Printed 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 Nan Ya i.e., Nan Ya and Global Unichip go up and down completely randomly.
Pair Corralation between Nan Ya and Global Unichip
Assuming the 90 days trading horizon Nan Ya Printed is expected to under-perform the Global Unichip. But the stock apears to be less risky and, when comparing its historical volatility, Nan Ya Printed is 1.31 times less risky than Global Unichip. The stock trades about -0.15 of its potential returns per unit of risk. The Global Unichip Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 157,000 in Global Unichip Corp on September 1, 2024 and sell it today you would lose (38,000) from holding Global Unichip Corp or give up 24.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Ya Printed vs. Global Unichip Corp
Performance |
| Timeline |
| Nan Ya Printed |
| Global Unichip Corp |
Nan Ya and Global Unichip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Global Unichip
The main advantage of trading using opposite Nan Ya and Global Unichip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya 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.| Nan Ya vs. Unimicron Technology Corp | Nan Ya vs. Kinsus Interconnect Technology | Nan Ya vs. Novatek Microelectronics Corp | Nan Ya vs. Delta Electronics |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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