Correlation Between GlobalWafers and Ampire
Can any of the company-specific risk be diversified away by investing in both GlobalWafers and Ampire 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 GlobalWafers and Ampire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalWafers Co and Ampire Co, you can compare the effects of market volatilities on GlobalWafers and Ampire 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 GlobalWafers with a short position of Ampire. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalWafers and Ampire.
Diversification Opportunities for GlobalWafers and Ampire
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GlobalWafers and Ampire is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding GlobalWafers Co and Ampire Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampire and GlobalWafers 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 GlobalWafers Co are associated (or correlated) with Ampire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampire has no effect on the direction of GlobalWafers i.e., GlobalWafers and Ampire go up and down completely randomly.
Pair Corralation between GlobalWafers and Ampire
Assuming the 90 days trading horizon GlobalWafers Co is expected to under-perform the Ampire. In addition to that, GlobalWafers is 2.79 times more volatile than Ampire Co. It trades about -0.15 of its total potential returns per unit of risk. Ampire Co is currently generating about -0.16 per unit of volatility. If you would invest 3,500 in Ampire Co on September 26, 2024 and sell it today you would lose (240.00) from holding Ampire Co or give up 6.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
GlobalWafers Co vs. Ampire Co
Performance |
Timeline |
GlobalWafers |
Ampire |
GlobalWafers and Ampire Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GlobalWafers and Ampire
The main advantage of trading using opposite GlobalWafers and Ampire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalWafers position performs unexpectedly, Ampire 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 Ampire will offset losses from the drop in Ampire's long position.GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo Corp |
Ampire vs. Taiwan Semiconductor Manufacturing | Ampire vs. MediaTek | Ampire vs. United Microelectronics | Ampire 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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