Correlation Between TOREX SEMICONDUCTOR and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both TOREX SEMICONDUCTOR and Advanced Micro 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 TOREX SEMICONDUCTOR and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOREX SEMICONDUCTOR LTD and Advanced Micro Devices, you can compare the effects of market volatilities on TOREX SEMICONDUCTOR and Advanced Micro 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 TOREX SEMICONDUCTOR with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOREX SEMICONDUCTOR and Advanced Micro.
Diversification Opportunities for TOREX SEMICONDUCTOR and Advanced Micro
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TOREX and Advanced is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding TOREX SEMICONDUCTOR LTD and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR LTD are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of TOREX SEMICONDUCTOR i.e., TOREX SEMICONDUCTOR and Advanced Micro go up and down completely randomly.
Pair Corralation between TOREX SEMICONDUCTOR and Advanced Micro
Assuming the 90 days horizon TOREX SEMICONDUCTOR LTD is expected to under-perform the Advanced Micro. In addition to that, TOREX SEMICONDUCTOR is 1.19 times more volatile than Advanced Micro Devices. It trades about -0.05 of its total potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.01 per unit of volatility. If you would invest 14,458 in Advanced Micro Devices on September 3, 2024 and sell it today you would lose (1,422) from holding Advanced Micro Devices or give up 9.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOREX SEMICONDUCTOR LTD vs. Advanced Micro Devices
Performance |
| Timeline |
| TOREX SEMICONDUCTOR LTD |
| Advanced Micro Devices |
TOREX SEMICONDUCTOR and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOREX SEMICONDUCTOR and Advanced Micro
The main advantage of trading using opposite TOREX SEMICONDUCTOR and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOREX SEMICONDUCTOR position performs unexpectedly, Advanced Micro 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 Micro will offset losses from the drop in Advanced Micro's long position.| TOREX SEMICONDUCTOR vs. NVIDIA | TOREX SEMICONDUCTOR vs. Taiwan Semiconductor Manufacturing | TOREX SEMICONDUCTOR vs. Advanced Micro Devices | TOREX SEMICONDUCTOR vs. Intel |
| Advanced Micro vs. Information Services International Dentsu | Advanced Micro vs. MagnaChip Semiconductor Corp | Advanced Micro vs. DOCDATA | Advanced Micro vs. Nordic Semiconductor ASA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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