Correlation Between Ingenic Semiconductor and Shantou Wanshun

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

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

Diversification Opportunities for Ingenic Semiconductor and Shantou Wanshun

0.75

Correlation Coefficient

Ingenic Semiconductor  Shantou Wanshun

Poor diversification

The 3 months correlation between Ingenic and Shantou is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ingenic Semiconductor and Shantou Wanshun Package in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantou Wanshun Package and Ingenic Semiconductor 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 Ingenic Semiconductor are associated (or correlated) with Shantou Wanshun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantou Wanshun Package has no effect on the direction of Ingenic Semiconductor i.e., Ingenic Semiconductor and Shantou Wanshun go up and down completely randomly.

Pair Corralation between Ingenic Semiconductor and Shantou Wanshun

Assuming the 90 days trading horizon Ingenic Semiconductor is expected to generate 7.45 times less return on investment than Shantou Wanshun. In addition to that, Ingenic Semiconductor is 1.04 times more volatile than Shantou Wanshun Package. It trades about 0.0 of its total potential returns per unit of risk. Shantou Wanshun Package is currently generating about 0.04 per unit of volatility. If you would invest  493.00  in Shantou Wanshun Package on December 26, 2024 and sell it today you would earn a total of  22.00  from holding Shantou Wanshun Package or generate 4.46% return on investment over 90 days.

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

Ingenic Semiconductor  vs.  Shantou Wanshun Package

Ingenic Semiconductor

Risk-Adjusted Performance

Weak

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

Shantou Wanshun Package

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shantou Wanshun Package are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shantou Wanshun may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ingenic Semiconductor and Shantou Wanshun

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

The idea behind Ingenic Semiconductor and Shantou Wanshun Package 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.