Correlation Between Wafer Works and GlobalWafers
Can any of the company-specific risk be diversified away by investing in both Wafer Works and GlobalWafers 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 Wafer Works and GlobalWafers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wafer Works and GlobalWafers Co, you can compare the effects of market volatilities on Wafer Works and GlobalWafers 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 Wafer Works with a short position of GlobalWafers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wafer Works and GlobalWafers.
Diversification Opportunities for Wafer Works and GlobalWafers
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wafer and GlobalWafers is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Wafer Works and GlobalWafers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalWafers and Wafer Works 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 Wafer Works are associated (or correlated) with GlobalWafers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalWafers has no effect on the direction of Wafer Works i.e., Wafer Works and GlobalWafers go up and down completely randomly.
Pair Corralation between Wafer Works and GlobalWafers
Assuming the 90 days trading horizon Wafer Works is expected to under-perform the GlobalWafers. In addition to that, Wafer Works is 1.07 times more volatile than GlobalWafers Co. It trades about -0.06 of its total potential returns per unit of risk. GlobalWafers Co is currently generating about -0.07 per unit of volatility. If you would invest 45,450 in GlobalWafers Co on September 6, 2024 and sell it today you would lose (3,050) from holding GlobalWafers Co or give up 6.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.41% |
Values | Daily Returns |
Wafer Works vs. GlobalWafers Co
Performance |
Timeline |
Wafer Works |
GlobalWafers |
Wafer Works and GlobalWafers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wafer Works and GlobalWafers
The main advantage of trading using opposite Wafer Works and GlobalWafers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wafer Works position performs unexpectedly, GlobalWafers 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 GlobalWafers will offset losses from the drop in GlobalWafers' long position.Wafer Works vs. Sino American Silicon Products | Wafer Works vs. GlobalWafers Co | Wafer Works vs. Motech Industries Co | Wafer Works vs. Formosa Sumco Technology |
GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |