Correlation Between ANT and ChipMOS Technologies

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

By analyzing existing cross correlation between ANT and ChipMOS Technologies, you can compare the effects of market volatilities on ANT and ChipMOS Technologies 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 ANT with a short position of ChipMOS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and ChipMOS Technologies.

Diversification Opportunities for ANT and ChipMOS Technologies

0.39

Correlation Coefficient

ANT  ChipMOS Technologies

Weak diversification

The 3 months correlation between ANT and ChipMOS is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ANT and ChipMOS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipMOS Technologies and ANT 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 ANT are associated (or correlated) with ChipMOS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipMOS Technologies has no effect on the direction of ANT i.e., ANT and ChipMOS Technologies go up and down completely randomly.

Pair Corralation between ANT and ChipMOS Technologies

Assuming the 90 days trading horizon ANT is expected to generate 38.18 times more return on investment than ChipMOS Technologies. However, ANT is 38.18 times more volatile than ChipMOS Technologies. It trades about 0.1 of its potential returns per unit of risk. ChipMOS Technologies is currently generating about -0.01 per unit of risk. If you would invest  307.00  in ANT on October 26, 2024 and sell it today you would lose (160.00) from holding ANT or give up 52.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	61.19%
Values	Daily Returns

ANT  vs.  ChipMOS Technologies

ANT

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

ChipMOS Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChipMOS Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with ANT and ChipMOS Technologies

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

The idea behind ANT and ChipMOS Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.