Correlation Between Green World and Champion Microelectronic

Can any of the company-specific risk be diversified away by investing in both Green World 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 Green World and Champion Microelectronic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Green World Fintech and Champion Microelectronic Corp, you can compare the effects of market volatilities on Green World 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 Green World with a short position of Champion Microelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green World and Champion Microelectronic.

Diversification Opportunities for Green World and Champion Microelectronic

0.48

Correlation Coefficient

Green World  Champion Microelectronic

Very weak diversification

The 3 months correlation between Green and Champion is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Green World Fintech and Champion Microelectronic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Microelectronic and Green World 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 Green World Fintech 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 Green World i.e., Green World and Champion Microelectronic go up and down completely randomly.

Pair Corralation between Green World and Champion Microelectronic

Assuming the 90 days trading horizon Green World Fintech is expected to under-perform the Champion Microelectronic. In addition to that, Green World is 1.08 times more volatile than Champion Microelectronic Corp. It trades about -0.11 of its total potential returns per unit of risk. Champion Microelectronic Corp is currently generating about 0.05 per unit of volatility. If you would invest  5,210  in Champion Microelectronic Corp on October 14, 2024 and sell it today you would earn a total of  90.00  from holding Champion Microelectronic Corp or generate 1.73% return on investment over 90 days.

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

Green World Fintech  vs.  Champion Microelectronic Corp

Green World Fintech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Green World Fintech are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Green World showed solid returns over the last few months and may actually be approaching a breakup point.

Champion Microelectronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Champion Microelectronic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Green World and Champion Microelectronic

The main advantage of trading using opposite Green World and Champion Microelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green World 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.

The idea behind Green World Fintech and Champion Microelectronic Corp 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.