Correlation Between WIN Semiconductors and Analog Integrations

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Can any of the company-specific risk be diversified away by investing in both WIN Semiconductors and Analog Integrations 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 Analog Integrations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIN Semiconductors and Analog Integrations, you can compare the effects of market volatilities on WIN Semiconductors and Analog Integrations 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 Analog Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIN Semiconductors and Analog Integrations.

Diversification Opportunities for WIN Semiconductors and Analog Integrations

WINAnalogDiversified AwayWINAnalogDiversified Away100%
0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between WIN and Analog is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and Analog Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Integrations 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 Analog Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Integrations has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and Analog Integrations go up and down completely randomly.

Pair Corralation between WIN Semiconductors and Analog Integrations

Assuming the 90 days trading horizon WIN Semiconductors is expected to under-perform the Analog Integrations. But the stock apears to be less risky and, when comparing its historical volatility, WIN Semiconductors is 1.93 times less risky than Analog Integrations. The stock trades about -0.17 of its potential returns per unit of risk. The Analog Integrations is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  10,550  in Analog Integrations on October 9, 2024 and sell it today you would lose (1,590) from holding Analog Integrations or give up 15.07% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

WIN Semiconductors  vs.  Analog Integrations

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -20-15-10-505
JavaScript chart by amCharts 3.21.153105 6291
       Timeline  
WIN Semiconductors 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 abnormal 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan105110115120125130135
Analog Integrations 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Analog Integrations 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9095100105110115120

WIN Semiconductors and Analog Integrations Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.96-2.22-1.47-0.730.00.611.231.842.46 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.153105 6291
       Returns  

Pair Trading with WIN Semiconductors and Analog Integrations

The main advantage of trading using opposite WIN Semiconductors and Analog Integrations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIN Semiconductors position performs unexpectedly, Analog Integrations 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 Analog Integrations will offset losses from the drop in Analog Integrations' long position.
The idea behind WIN Semiconductors and Analog Integrations 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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