Correlation Between SEALSQ Corp and ChipMOS Technologies

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

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

Diversification Opportunities for SEALSQ Corp and ChipMOS Technologies

-0.24

Correlation Coefficient

SEALSQ Corp  ChipMOS Technologies

Very good diversification

The 3 months correlation between SEALSQ and ChipMOS is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SEALSQ Corp and ChipMOS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipMOS Technologies and SEALSQ Corp 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 SEALSQ Corp 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 SEALSQ Corp i.e., SEALSQ Corp and ChipMOS Technologies go up and down completely randomly.

Pair Corralation between SEALSQ Corp and ChipMOS Technologies

Given the investment horizon of 90 days SEALSQ Corp is expected to generate 10.84 times more return on investment than ChipMOS Technologies. However, SEALSQ Corp is 10.84 times more volatile than ChipMOS Technologies. It trades about 0.24 of its potential returns per unit of risk. ChipMOS Technologies is currently generating about -0.02 per unit of risk. If you would invest  41.00  in SEALSQ Corp on November 29, 2024 and sell it today you would earn a total of  268.00  from holding SEALSQ Corp or generate 653.66% return on investment over 90 days.

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

SEALSQ Corp  vs.  ChipMOS Technologies

SEALSQ Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

ChipMOS Technologies

Risk-Adjusted Performance

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 comparatively stable basic indicators, ChipMOS Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SEALSQ Corp and ChipMOS Technologies

The main advantage of trading using opposite SEALSQ Corp and ChipMOS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALSQ Corp 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 SEALSQ Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.