Correlation Between WIN Semiconductors and Episil Holding

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

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

Diversification Opportunities for WIN Semiconductors and Episil Holding

0.76

Correlation Coefficient

WIN Semiconductors  Episil Holding

Poor diversification

The 3 months correlation between WIN and Episil is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and Episil Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Episil Holding and WIN Semiconductors 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 WIN Semiconductors are associated (or correlated) with Episil Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Episil Holding has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and Episil Holding go up and down completely randomly.

Pair Corralation between WIN Semiconductors and Episil Holding

Assuming the 90 days trading horizon WIN Semiconductors is expected to generate 0.92 times more return on investment than Episil Holding. However, WIN Semiconductors is 1.09 times less risky than Episil Holding. It trades about 0.07 of its potential returns per unit of risk. Episil Holding is currently generating about 0.03 per unit of risk. If you would invest  11,050  in WIN Semiconductors on December 22, 2024 and sell it today you would earn a total of  1,000.00  from holding WIN Semiconductors or generate 9.05% return on investment over 90 days.

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

WIN Semiconductors  vs.  Episil Holding

WIN Semiconductors

Risk-Adjusted Performance

Modest

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

Episil Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Episil Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Episil Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with WIN Semiconductors and Episil Holding

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

The idea behind WIN Semiconductors and Episil Holding 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 Transaction History module to view history of all your transactions and understand their impact on performance.