Correlation Between Marketech International and WIN Semiconductors

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

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

Diversification Opportunities for Marketech International and WIN Semiconductors

0.52

Correlation Coefficient

Marketech International  WIN Semiconductors

Very weak diversification

The 3 months correlation between Marketech and WIN is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Marketech International Corp and WIN Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIN Semiconductors and Marketech International 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 Marketech International Corp are associated (or correlated) with WIN Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIN Semiconductors has no effect on the direction of Marketech International i.e., Marketech International and WIN Semiconductors go up and down completely randomly.

Pair Corralation between Marketech International and WIN Semiconductors

Assuming the 90 days trading horizon Marketech International Corp is expected to generate 0.62 times more return on investment than WIN Semiconductors. However, Marketech International Corp is 1.62 times less risky than WIN Semiconductors. It trades about -0.03 of its potential returns per unit of risk. WIN Semiconductors is currently generating about -0.11 per unit of risk. If you would invest  14,750  in Marketech International Corp on September 18, 2024 and sell it today you would lose (100.00) from holding Marketech International Corp or give up 0.68% of portfolio value over 90 days.

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

Marketech International Corp  vs.  WIN Semiconductors

Marketech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marketech International Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Marketech International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 latest weak 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 Marketech International and WIN Semiconductors

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

The idea behind Marketech International Corp and WIN Semiconductors 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.