Correlation Between WT Microelectronics and Silitech Technology
Can any of the company-specific risk be diversified away by investing in both WT Microelectronics and Silitech Technology 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 WT Microelectronics and Silitech Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT Microelectronics Co and Silitech Technology Corp, you can compare the effects of market volatilities on WT Microelectronics and Silitech Technology 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 WT Microelectronics with a short position of Silitech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT Microelectronics and Silitech Technology.
Diversification Opportunities for WT Microelectronics and Silitech Technology
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 3036A and Silitech is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding WT Microelectronics Co and Silitech Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silitech Technology Corp and WT Microelectronics 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 WT Microelectronics Co are associated (or correlated) with Silitech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silitech Technology Corp has no effect on the direction of WT Microelectronics i.e., WT Microelectronics and Silitech Technology go up and down completely randomly.
Pair Corralation between WT Microelectronics and Silitech Technology
Assuming the 90 days trading horizon WT Microelectronics is expected to generate 1.18 times less return on investment than Silitech Technology. But when comparing it to its historical volatility, WT Microelectronics Co is 4.2 times less risky than Silitech Technology. It trades about 0.05 of its potential returns per unit of risk. Silitech Technology Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,335 in Silitech Technology Corp on September 26, 2024 and sell it today you would earn a total of 140.00 from holding Silitech Technology Corp or generate 4.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 99.79% |
Values | Daily Returns |
WT Microelectronics Co vs. Silitech Technology Corp
Performance |
Timeline |
WT Microelectronics |
Silitech Technology Corp |
WT Microelectronics and Silitech Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WT Microelectronics and Silitech Technology
The main advantage of trading using opposite WT Microelectronics and Silitech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT Microelectronics position performs unexpectedly, Silitech Technology 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 Silitech Technology will offset losses from the drop in Silitech Technology's long position.WT Microelectronics vs. Taiwan Semiconductor Manufacturing | WT Microelectronics vs. MediaTek | WT Microelectronics vs. United Microelectronics | WT Microelectronics vs. Novatek Microelectronics Corp |
Silitech Technology vs. Ichia Technologies | Silitech Technology vs. Cheng Uei Precision | Silitech Technology vs. Gemtek Technology Co | Silitech Technology vs. Sunplus Technology Co |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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