Correlation Between Kuangda Technology and Will Semiconductor

Can any of the company-specific risk be diversified away by investing in both Kuangda Technology and Will 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 Kuangda Technology and Will Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kuangda Technology Group and Will Semiconductor Co, you can compare the effects of market volatilities on Kuangda Technology and Will 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 Kuangda Technology with a short position of Will Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuangda Technology and Will Semiconductor.

Diversification Opportunities for Kuangda Technology and Will Semiconductor

-0.15

Correlation Coefficient

Kuangda Technology  Will Semiconductor

Good diversification

The 3 months correlation between Kuangda and Will is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kuangda Technology Group and Will Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Will Semiconductor and Kuangda Technology 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 Kuangda Technology Group are associated (or correlated) with Will Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Will Semiconductor has no effect on the direction of Kuangda Technology i.e., Kuangda Technology and Will Semiconductor go up and down completely randomly.

Pair Corralation between Kuangda Technology and Will Semiconductor

Assuming the 90 days trading horizon Kuangda Technology Group is expected to under-perform the Will Semiconductor. In addition to that, Kuangda Technology is 1.59 times more volatile than Will Semiconductor Co. It trades about -0.09 of its total potential returns per unit of risk. Will Semiconductor Co is currently generating about -0.12 per unit of volatility. If you would invest  11,062  in Will Semiconductor Co on October 6, 2024 and sell it today you would lose (1,212) from holding Will Semiconductor Co or give up 10.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kuangda Technology Group  vs.  Will Semiconductor Co

Kuangda Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kuangda Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kuangda Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Will Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Will Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kuangda Technology and Will Semiconductor

The main advantage of trading using opposite Kuangda Technology and Will Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuangda Technology position performs unexpectedly, Will 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 Will Semiconductor will offset losses from the drop in Will Semiconductor's long position.

The idea behind Kuangda Technology Group and Will 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.