Correlation Between Chi Sheng and Winstek Semiconductor

Can any of the company-specific risk be diversified away by investing in both Chi Sheng and Winstek Semiconductor 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 Chi Sheng and Winstek Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chi Sheng Chemical and Winstek Semiconductor Co, you can compare the effects of market volatilities on Chi Sheng and Winstek Semiconductor 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 Chi Sheng with a short position of Winstek Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Winstek Semiconductor.

Diversification Opportunities for Chi Sheng and Winstek Semiconductor

-0.72

Correlation Coefficient

Chi Sheng  Winstek Semiconductor

Pay attention - limited upside

The 3 months correlation between Chi and Winstek is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical and Winstek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winstek Semiconductor and Chi Sheng 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 Chi Sheng Chemical are associated (or correlated) with Winstek Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winstek Semiconductor has no effect on the direction of Chi Sheng i.e., Chi Sheng and Winstek Semiconductor go up and down completely randomly.

Pair Corralation between Chi Sheng and Winstek Semiconductor

Assuming the 90 days trading horizon Chi Sheng Chemical is expected to generate 0.58 times more return on investment than Winstek Semiconductor. However, Chi Sheng Chemical is 1.72 times less risky than Winstek Semiconductor. It trades about 0.14 of its potential returns per unit of risk. Winstek Semiconductor Co is currently generating about -0.06 per unit of risk. If you would invest  2,780  in Chi Sheng Chemical on December 23, 2024 and sell it today you would earn a total of  285.00  from holding Chi Sheng Chemical or generate 10.25% return on investment over 90 days.

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

Chi Sheng Chemical  vs.  Winstek Semiconductor Co

Chi Sheng Chemical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chi Sheng Chemical are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chi Sheng may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Winstek Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Winstek Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Chi Sheng and Winstek Semiconductor

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

The idea behind Chi Sheng Chemical and Winstek Semiconductor 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.