Correlation Between Advanced Energy and Walsin Lihwa

Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Walsin Lihwa 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 Advanced Energy and Walsin Lihwa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advanced Energy Solution and Walsin Lihwa Corp, you can compare the effects of market volatilities on Advanced Energy and Walsin Lihwa 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 Advanced Energy with a short position of Walsin Lihwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Walsin Lihwa.

Diversification Opportunities for Advanced Energy and Walsin Lihwa

0.0

Correlation Coefficient

Advanced Energy  Walsin Lihwa

Pay attention - limited upside

The 3 months correlation between Advanced and Walsin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Solution and Walsin Lihwa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Lihwa Corp and Advanced Energy 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 Advanced Energy Solution are associated (or correlated) with Walsin Lihwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Lihwa Corp has no effect on the direction of Advanced Energy i.e., Advanced Energy and Walsin Lihwa go up and down completely randomly.

Pair Corralation between Advanced Energy and Walsin Lihwa

If you would invest (100.00) in Walsin Lihwa Corp on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Walsin Lihwa Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Advanced Energy Solution  vs.  Walsin Lihwa Corp

Advanced Energy Solution

Risk-Adjusted Performance

Very Weak

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

Walsin Lihwa Corp

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Advanced Energy and Walsin Lihwa

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

The idea behind Advanced Energy Solution and Walsin Lihwa 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..