Correlation Between WIN Semiconductors and Silergy Corp

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

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

Diversification Opportunities for WIN Semiconductors and Silergy Corp

0.28

Correlation Coefficient

WIN Semiconductors  Silergy Corp

Modest diversification

The 3 months correlation between WIN and Silergy is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding WIN Semiconductors and Silergy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silergy Corp 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 Silergy Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silergy Corp has no effect on the direction of WIN Semiconductors i.e., WIN Semiconductors and Silergy Corp go up and down completely randomly.

Pair Corralation between WIN Semiconductors and Silergy Corp

Assuming the 90 days trading horizon WIN Semiconductors is expected to generate 0.47 times more return on investment than Silergy Corp. However, WIN Semiconductors is 2.13 times less risky than Silergy Corp. It trades about -0.18 of its potential returns per unit of risk. Silergy Corp is currently generating about -0.13 per unit of risk. If you would invest  11,950  in WIN Semiconductors on September 12, 2024 and sell it today you would lose (650.00) from holding WIN Semiconductors or give up 5.44% of portfolio value over 90 days.

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

WIN Semiconductors  vs.  Silergy Corp

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Silergy Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Silergy Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Silergy Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with WIN Semiconductors and Silergy Corp

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

The idea behind WIN Semiconductors and Silergy Corp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.