Correlation Between WIN Semiconductors and Tong Hsing

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

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

Diversification Opportunities for WIN Semiconductors and Tong Hsing

0.14

Correlation Coefficient

WIN Semiconductors  Tong Hsing

Average diversification

The 3 months correlation between WIN and Tong is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and Tong Hsing Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Hsing Electronic 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 Tong Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Hsing Electronic has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and Tong Hsing go up and down completely randomly.

Pair Corralation between WIN Semiconductors and Tong Hsing

Assuming the 90 days trading horizon WIN Semiconductors is expected to generate 1.44 times more return on investment than Tong Hsing. However, WIN Semiconductors is 1.44 times more volatile than Tong Hsing Electronic. It trades about -0.03 of its potential returns per unit of risk. Tong Hsing Electronic is currently generating about -0.13 per unit of risk. If you would invest  11,400  in WIN Semiconductors on December 28, 2024 and sell it today you would lose (700.00) from holding WIN Semiconductors or give up 6.14% of portfolio value over 90 days.

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

WIN Semiconductors  vs.  Tong Hsing Electronic

WIN Semiconductors

Risk-Adjusted Performance

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 fairly stable basic indicators, WIN Semiconductors is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Tong Hsing Electronic

Risk-Adjusted Performance

Very Weak

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

Pair Trading with WIN Semiconductors and Tong Hsing

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

The idea behind WIN Semiconductors and Tong Hsing Electronic 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.