Correlation Between Giant Manufacturing and WIN Semiconductors
Can any of the company-specific risk be diversified away by investing in both Giant Manufacturing and WIN Semiconductors 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 Giant Manufacturing and WIN Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giant Manufacturing Co and WIN Semiconductors, you can compare the effects of market volatilities on Giant Manufacturing and WIN Semiconductors 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 Giant Manufacturing with a short position of WIN Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giant Manufacturing and WIN Semiconductors.
Diversification Opportunities for Giant Manufacturing and WIN Semiconductors
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Giant and WIN is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Giant Manufacturing Co and WIN Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIN Semiconductors and Giant Manufacturing 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 Giant Manufacturing Co are associated (or correlated) with WIN Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIN Semiconductors has no effect on the direction of Giant Manufacturing i.e., Giant Manufacturing and WIN Semiconductors go up and down completely randomly.
Pair Corralation between Giant Manufacturing and WIN Semiconductors
Assuming the 90 days trading horizon Giant Manufacturing Co is expected to under-perform the WIN Semiconductors. But the stock apears to be less risky and, when comparing its historical volatility, Giant Manufacturing Co is 1.21 times less risky than WIN Semiconductors. The stock trades about -0.02 of its potential returns per unit of risk. The WIN Semiconductors is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 13,590 in WIN Semiconductors on September 13, 2024 and sell it today you would lose (2,190) from holding WIN Semiconductors or give up 16.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Giant Manufacturing Co vs. WIN Semiconductors
Performance |
| Timeline |
| Giant Manufacturing |
| WIN Semiconductors |
Giant Manufacturing and WIN Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giant Manufacturing and WIN Semiconductors
The main advantage of trading using opposite Giant Manufacturing and WIN Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giant Manufacturing position performs unexpectedly, WIN Semiconductors 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 WIN Semiconductors will offset losses from the drop in WIN Semiconductors' long position.| Giant Manufacturing vs. Feng Tay Enterprises | Giant Manufacturing vs. Ruentex Development Co | Giant Manufacturing vs. WiseChip Semiconductor | Giant Manufacturing vs. Novatek Microelectronics Corp |
| WIN Semiconductors vs. LARGAN Precision Co | WIN Semiconductors vs. GlobalWafers Co | WIN Semiconductors vs. Novatek Microelectronics Corp | WIN Semiconductors vs. Advanced Wireless 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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