Correlation Between Winbond Electronics and Delta Electronics

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

By analyzing existing cross correlation between Winbond Electronics Corp and Delta Electronics, you can compare the effects of market volatilities on Winbond Electronics and Delta Electronics 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 Winbond Electronics with a short position of Delta Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winbond Electronics and Delta Electronics.

Diversification Opportunities for Winbond Electronics and Delta Electronics

-0.72

Correlation Coefficient

Winbond Electronics  Delta Electronics

Pay attention - limited upside

The 3 months correlation between Winbond and Delta is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Winbond Electronics Corp and Delta Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics and Winbond Electronics 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 Winbond Electronics Corp are associated (or correlated) with Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics has no effect on the direction of Winbond Electronics i.e., Winbond Electronics and Delta Electronics go up and down completely randomly.

Pair Corralation between Winbond Electronics and Delta Electronics

Assuming the 90 days trading horizon Winbond Electronics Corp is expected to generate 1.25 times more return on investment than Delta Electronics. However, Winbond Electronics is 1.25 times more volatile than Delta Electronics. It trades about 0.14 of its potential returns per unit of risk. Delta Electronics is currently generating about -0.09 per unit of risk. If you would invest  1,500  in Winbond Electronics Corp on December 30, 2024 and sell it today you would earn a total of  370.00  from holding Winbond Electronics Corp or generate 24.67% return on investment over 90 days.

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

Winbond Electronics Corp  vs.  Delta Electronics

Winbond Electronics Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Winbond Electronics Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Winbond Electronics showed solid returns over the last few months and may actually be approaching a breakup point.

Delta Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Winbond Electronics and Delta Electronics

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

The idea behind Winbond Electronics Corp and Delta Electronics 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.