Correlation Between TOREX SEMICONDUCTOR and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both TOREX SEMICONDUCTOR and Xinhua Winshare 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 TOREX SEMICONDUCTOR and Xinhua Winshare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOREX SEMICONDUCTOR LTD and Xinhua Winshare Publishing, you can compare the effects of market volatilities on TOREX SEMICONDUCTOR and Xinhua Winshare 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 TOREX SEMICONDUCTOR with a short position of Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOREX SEMICONDUCTOR and Xinhua Winshare.
Diversification Opportunities for TOREX SEMICONDUCTOR and Xinhua Winshare
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TOREX and Xinhua is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding TOREX SEMICONDUCTOR LTD and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ and TOREX 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 TOREX SEMICONDUCTOR LTD are associated (or correlated) with Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of TOREX SEMICONDUCTOR i.e., TOREX SEMICONDUCTOR and Xinhua Winshare go up and down completely randomly.
Pair Corralation between TOREX SEMICONDUCTOR and Xinhua Winshare
Assuming the 90 days horizon TOREX SEMICONDUCTOR LTD is expected to under-perform the Xinhua Winshare. But the stock apears to be less risky and, when comparing its historical volatility, TOREX SEMICONDUCTOR LTD is 1.96 times less risky than Xinhua Winshare. The stock trades about -0.07 of its potential returns per unit of risk. The Xinhua Winshare Publishing is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Xinhua Winshare Publishing on September 25, 2024 and sell it today you would earn a total of 126.00 from holding Xinhua Winshare Publishing or generate 969.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
TOREX SEMICONDUCTOR LTD vs. Xinhua Winshare Publishing
Performance |
Timeline |
TOREX SEMICONDUCTOR LTD |
Xinhua Winshare Publ |
TOREX SEMICONDUCTOR and Xinhua Winshare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TOREX SEMICONDUCTOR and Xinhua Winshare
The main advantage of trading using opposite TOREX SEMICONDUCTOR and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOREX SEMICONDUCTOR position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.TOREX SEMICONDUCTOR vs. Taiwan Semiconductor Manufacturing | TOREX SEMICONDUCTOR vs. Broadcom | TOREX SEMICONDUCTOR vs. Texas Instruments Incorporated | TOREX SEMICONDUCTOR vs. QUALCOMM Incorporated |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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