Correlation Between P Duke and Walsin Lihwa

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

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

Diversification Opportunities for P Duke and Walsin Lihwa

-0.02

Correlation Coefficient

P Duke  Walsin Lihwa

Good diversification

The 3 months correlation between 8109 and Walsin is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding P Duke Technology Co 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 P Duke 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 P Duke Technology Co 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 P Duke i.e., P Duke and Walsin Lihwa go up and down completely randomly.

Pair Corralation between P Duke and Walsin Lihwa

Assuming the 90 days trading horizon P Duke Technology Co is expected to generate 0.45 times more return on investment than Walsin Lihwa. However, P Duke Technology Co is 2.21 times less risky than Walsin Lihwa. It trades about 0.31 of its potential returns per unit of risk. Walsin Lihwa Corp is currently generating about -0.36 per unit of risk. If you would invest  8,770  in P Duke Technology Co on October 10, 2024 and sell it today you would earn a total of  460.00  from holding P Duke Technology Co or generate 5.25% return on investment over 90 days.

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

P Duke Technology Co  vs.  Walsin Lihwa Corp

P Duke Technology

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in P Duke Technology Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, P Duke may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Walsin Lihwa Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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 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 P Duke and Walsin Lihwa

The main advantage of trading using opposite P Duke and Walsin Lihwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if P Duke 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 P Duke Technology Co 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.