Correlation Between WiseChip Semiconductor and Golden Friends
Can any of the company-specific risk be diversified away by investing in both WiseChip Semiconductor and Golden Friends 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 WiseChip Semiconductor and Golden Friends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseChip Semiconductor and Golden Friends, you can compare the effects of market volatilities on WiseChip Semiconductor and Golden Friends 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 WiseChip Semiconductor with a short position of Golden Friends. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseChip Semiconductor and Golden Friends.
Diversification Opportunities for WiseChip Semiconductor and Golden Friends
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WiseChip and Golden is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding WiseChip Semiconductor and Golden Friends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Friends and WiseChip Semiconductor 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 WiseChip Semiconductor are associated (or correlated) with Golden Friends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Friends has no effect on the direction of WiseChip Semiconductor i.e., WiseChip Semiconductor and Golden Friends go up and down completely randomly.
Pair Corralation between WiseChip Semiconductor and Golden Friends
Assuming the 90 days trading horizon WiseChip Semiconductor is expected to under-perform the Golden Friends. In addition to that, WiseChip Semiconductor is 3.15 times more volatile than Golden Friends. It trades about -0.04 of its total potential returns per unit of risk. Golden Friends is currently generating about 0.06 per unit of volatility. If you would invest 9,960 in Golden Friends on September 17, 2024 and sell it today you would earn a total of 290.00 from holding Golden Friends or generate 2.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
WiseChip Semiconductor vs. Golden Friends
Performance |
Timeline |
WiseChip Semiconductor |
Golden Friends |
WiseChip Semiconductor and Golden Friends Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WiseChip Semiconductor and Golden Friends
The main advantage of trading using opposite WiseChip Semiconductor and Golden Friends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseChip Semiconductor position performs unexpectedly, Golden Friends 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 Golden Friends will offset losses from the drop in Golden Friends' long position.WiseChip Semiconductor vs. AU Optronics | WiseChip Semiconductor vs. Innolux Corp | WiseChip Semiconductor vs. Ruentex Development Co | WiseChip Semiconductor vs. Novatek Microelectronics Corp |
Golden Friends vs. Ruentex Development Co | Golden Friends vs. WiseChip Semiconductor | Golden Friends vs. Novatek Microelectronics Corp | Golden Friends vs. Leader Electronics |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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