Correlation Between GM and Winstek Semiconductor
Can any of the company-specific risk be diversified away by investing in both GM and Winstek 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 GM and Winstek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Winstek Semiconductor Co, you can compare the effects of market volatilities on GM and Winstek 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 GM with a short position of Winstek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Winstek Semiconductor.
Diversification Opportunities for GM and Winstek Semiconductor
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Winstek is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Winstek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winstek Semiconductor and GM 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 General Motors are associated (or correlated) with Winstek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winstek Semiconductor has no effect on the direction of GM i.e., GM and Winstek Semiconductor go up and down completely randomly.
Pair Corralation between GM and Winstek Semiconductor
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Winstek Semiconductor. In addition to that, GM is 1.07 times more volatile than Winstek Semiconductor Co. It trades about -0.08 of its total potential returns per unit of risk. Winstek Semiconductor Co is currently generating about -0.05 per unit of volatility. If you would invest 11,400 in Winstek Semiconductor Co on November 30, 2024 and sell it today you would lose (600.00) from holding Winstek Semiconductor Co or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.8% |
| Values | Daily Returns |
General Motors vs. Winstek Semiconductor Co
Performance |
| Timeline |
| General Motors |
| Winstek Semiconductor |
GM and Winstek Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Winstek Semiconductor
The main advantage of trading using opposite GM and Winstek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Winstek 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 Winstek Semiconductor will offset losses from the drop in Winstek Semiconductor's long position.The idea behind General Motors and Winstek Semiconductor Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Winstek Semiconductor vs. Mosa Industrial Corp | Winstek Semiconductor vs. Singtex Industrial Co | Winstek Semiconductor vs. Far EasTone Telecommunications | Winstek Semiconductor vs. Tai Tung Communication |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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