Correlation Between Ingentec and Champion Microelectronic
Can any of the company-specific risk be diversified away by investing in both Ingentec and Champion Microelectronic 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 Ingentec and Champion Microelectronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingentec and Champion Microelectronic Corp, you can compare the effects of market volatilities on Ingentec and Champion Microelectronic 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 Ingentec with a short position of Champion Microelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingentec and Champion Microelectronic.
Diversification Opportunities for Ingentec and Champion Microelectronic
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ingentec and Champion is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Champion Microelectronic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Microelectronic and Ingentec 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 Ingentec are associated (or correlated) with Champion Microelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Microelectronic has no effect on the direction of Ingentec i.e., Ingentec and Champion Microelectronic go up and down completely randomly.
Pair Corralation between Ingentec and Champion Microelectronic
Assuming the 90 days trading horizon Ingentec is expected to generate 0.46 times more return on investment than Champion Microelectronic. However, Ingentec is 2.16 times less risky than Champion Microelectronic. It trades about -0.34 of its potential returns per unit of risk. Champion Microelectronic Corp is currently generating about -0.2 per unit of risk. If you would invest 20,250 in Ingentec on September 26, 2024 and sell it today you would lose (2,500) from holding Ingentec or give up 12.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Ingentec vs. Champion Microelectronic Corp
Performance |
Timeline |
Ingentec |
Champion Microelectronic |
Ingentec and Champion Microelectronic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ingentec and Champion Microelectronic
The main advantage of trading using opposite Ingentec and Champion Microelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingentec position performs unexpectedly, Champion Microelectronic 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 Champion Microelectronic will offset losses from the drop in Champion Microelectronic's long position.Ingentec vs. Nan Ya Plastics | Ingentec vs. China Petrochemical Development | Ingentec vs. Eternal Materials Co | Ingentec vs. TSRC Corp |
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Check out your portfolio center.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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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