Correlation Between Onyx Healthcare and Winstek Semiconductor

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

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

Diversification Opportunities for Onyx Healthcare and Winstek Semiconductor

0.03

Correlation Coefficient

Onyx Healthcare  Winstek Semiconductor

Significant diversification

The 3 months correlation between Onyx and Winstek is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Onyx Healthcare and Winstek Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winstek Semiconductor and Onyx Healthcare 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 Onyx Healthcare 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 Onyx Healthcare i.e., Onyx Healthcare and Winstek Semiconductor go up and down completely randomly.

Pair Corralation between Onyx Healthcare and Winstek Semiconductor

Assuming the 90 days trading horizon Onyx Healthcare is expected to generate 0.81 times more return on investment than Winstek Semiconductor. However, Onyx Healthcare is 1.23 times less risky than Winstek Semiconductor. It trades about 0.19 of its potential returns per unit of risk. Winstek Semiconductor Co is currently generating about -0.01 per unit of risk. If you would invest  14,850  in Onyx Healthcare on October 25, 2024 and sell it today you would earn a total of  1,450  from holding Onyx Healthcare or generate 9.76% return on investment over 90 days.

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

Onyx Healthcare  vs.  Winstek Semiconductor Co

Onyx Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Winstek Semiconductor

Risk-Adjusted Performance

0 of 100

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 fairly stable basic indicators, Winstek Semiconductor is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Onyx Healthcare and Winstek Semiconductor

The main advantage of trading using opposite Onyx Healthcare and Winstek Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onyx Healthcare 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 Onyx Healthcare 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.