Correlation Between WIN Semiconductors and Yuanta Futures

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

By analyzing existing cross correlation between WIN Semiconductors and Yuanta Futures Co, you can compare the effects of market volatilities on WIN Semiconductors and Yuanta Futures 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 Yuanta Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and Yuanta Futures.

Diversification Opportunities for WIN Semiconductors and Yuanta Futures

0.05

Correlation Coefficient

WIN Semiconductors  Yuanta Futures

Significant diversification

The 3 months correlation between WIN and Yuanta is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and Yuanta Futures Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanta Futures 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 Yuanta Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanta Futures has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and Yuanta Futures go up and down completely randomly.

Pair Corralation between WIN Semiconductors and Yuanta Futures

Assuming the 90 days trading horizon WIN Semiconductors is expected to under-perform the Yuanta Futures. In addition to that, WIN Semiconductors is 2.34 times more volatile than Yuanta Futures Co. It trades about -0.19 of its total potential returns per unit of risk. Yuanta Futures Co is currently generating about -0.02 per unit of volatility. If you would invest  8,650  in Yuanta Futures Co on October 6, 2024 and sell it today you would lose (90.00) from holding Yuanta Futures Co or give up 1.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

WIN Semiconductors  vs.  Yuanta Futures Co

WIN Semiconductors

Risk-Adjusted Performance

0 of 100

Very Weak

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

Yuanta Futures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuanta Futures Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yuanta Futures 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 Yuanta Futures

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

The idea behind WIN Semiconductors and Yuanta Futures Co 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.