Correlation Between Impinj and ChipMOS Technologies

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

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

Diversification Opportunities for Impinj and ChipMOS Technologies

0.85

Correlation Coefficient

Impinj  ChipMOS Technologies

Very poor diversification

The 3 months correlation between Impinj and ChipMOS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Impinj Inc and ChipMOS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipMOS Technologies and Impinj 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 Impinj Inc 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 Impinj i.e., Impinj and ChipMOS Technologies go up and down completely randomly.

Pair Corralation between Impinj and ChipMOS Technologies

Allowing for the 90-day total investment horizon Impinj Inc is expected to under-perform the ChipMOS Technologies. In addition to that, Impinj is 2.09 times more volatile than ChipMOS Technologies. It trades about -0.44 of its total potential returns per unit of risk. ChipMOS Technologies is currently generating about -0.14 per unit of volatility. If you would invest  1,992  in ChipMOS Technologies on September 24, 2024 and sell it today you would lose (81.00) from holding ChipMOS Technologies or give up 4.07% of portfolio value over 90 days.

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

Impinj Inc  vs.  ChipMOS Technologies

Impinj Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impinj Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Impinj and ChipMOS Technologies

The main advantage of trading using opposite Impinj and ChipMOS Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impinj 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 Impinj Inc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.