Correlation Between VIA Technologies and Weltrend Semiconductor

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

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

Diversification Opportunities for VIA Technologies and Weltrend Semiconductor

0.21

Correlation Coefficient

VIA Technologies  Weltrend Semiconductor

Modest diversification

The 3 months correlation between VIA and Weltrend is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding VIA Technologies and Weltrend Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weltrend Semiconductor and VIA Technologies 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 VIA Technologies are associated (or correlated) with Weltrend Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weltrend Semiconductor has no effect on the direction of VIA Technologies i.e., VIA Technologies and Weltrend Semiconductor go up and down completely randomly.

Pair Corralation between VIA Technologies and Weltrend Semiconductor

Assuming the 90 days trading horizon VIA Technologies is expected to under-perform the Weltrend Semiconductor. In addition to that, VIA Technologies is 1.35 times more volatile than Weltrend Semiconductor. It trades about -0.06 of its total potential returns per unit of risk. Weltrend Semiconductor is currently generating about 0.07 per unit of volatility. If you would invest  5,600  in Weltrend Semiconductor on December 21, 2024 and sell it today you would earn a total of  320.00  from holding Weltrend Semiconductor or generate 5.71% return on investment over 90 days.

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

VIA Technologies  vs.  Weltrend Semiconductor

VIA Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days VIA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Weltrend Semiconductor

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weltrend Semiconductor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Weltrend Semiconductor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with VIA Technologies and Weltrend Semiconductor

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

The idea behind VIA Technologies and Weltrend Semiconductor 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.