Correlation Between Thinkon Semiconductor and Western Superconducting

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

By analyzing existing cross correlation between Thinkon Semiconductor Jinzhou and Western Superconducting Tech, you can compare the effects of market volatilities on Thinkon Semiconductor and Western Superconducting 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 Thinkon Semiconductor with a short position of Western Superconducting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thinkon Semiconductor and Western Superconducting.

Diversification Opportunities for Thinkon Semiconductor and Western Superconducting

0.56

Correlation Coefficient

Thinkon Semiconductor  Western Superconducting

Very weak diversification

The 3 months correlation between Thinkon and Western is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Thinkon Semiconductor Jinzhou and Western Superconducting Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Superconducting and Thinkon 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 Thinkon Semiconductor Jinzhou are associated (or correlated) with Western Superconducting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Superconducting has no effect on the direction of Thinkon Semiconductor i.e., Thinkon Semiconductor and Western Superconducting go up and down completely randomly.

Pair Corralation between Thinkon Semiconductor and Western Superconducting

Assuming the 90 days trading horizon Thinkon Semiconductor Jinzhou is expected to under-perform the Western Superconducting. In addition to that, Thinkon Semiconductor is 1.4 times more volatile than Western Superconducting Tech. It trades about -0.23 of its total potential returns per unit of risk. Western Superconducting Tech is currently generating about -0.1 per unit of volatility. If you would invest  4,450  in Western Superconducting Tech on October 4, 2024 and sell it today you would lose (168.00) from holding Western Superconducting Tech or give up 3.78% of portfolio value over 90 days.

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

Thinkon Semiconductor Jinzhou  vs.  Western Superconducting Tech

Thinkon Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thinkon Semiconductor Jinzhou has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Thinkon Semiconductor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Western Superconducting

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Superconducting Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Thinkon Semiconductor and Western Superconducting

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

The idea behind Thinkon Semiconductor Jinzhou and Western Superconducting Tech 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.