Correlation Between Com2uS and Wemade CoLtd
Can any of the company-specific risk be diversified away by investing in both Com2uS and Wemade CoLtd 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 Com2uS and Wemade CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com2uS and Wemade CoLtd, you can compare the effects of market volatilities on Com2uS and Wemade CoLtd 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 Com2uS with a short position of Wemade CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com2uS and Wemade CoLtd.
Diversification Opportunities for Com2uS and Wemade CoLtd
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Com2uS and Wemade is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Com2uS and Wemade CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wemade CoLtd and Com2uS 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 Com2uS are associated (or correlated) with Wemade CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wemade CoLtd has no effect on the direction of Com2uS i.e., Com2uS and Wemade CoLtd go up and down completely randomly.
Pair Corralation between Com2uS and Wemade CoLtd
Assuming the 90 days trading horizon Com2uS is expected to under-perform the Wemade CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Com2uS is 1.81 times less risky than Wemade CoLtd. The stock trades about 0.0 of its potential returns per unit of risk. The Wemade CoLtd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,467,847 in Wemade CoLtd on September 2, 2024 and sell it today you would earn a total of 1,082,153 from holding Wemade CoLtd or generate 31.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Com2uS vs. Wemade CoLtd
Performance |
| Timeline |
| Com2uS |
| Wemade CoLtd |
Com2uS and Wemade CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com2uS and Wemade CoLtd
The main advantage of trading using opposite Com2uS and Wemade CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com2uS position performs unexpectedly, Wemade CoLtd 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 Wemade CoLtd will offset losses from the drop in Wemade CoLtd's long position.The idea behind Com2uS and Wemade CoLtd 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.| Wemade CoLtd vs. AfreecaTV Co | Wemade CoLtd vs. Seegene | Wemade CoLtd vs. SS TECH | Wemade CoLtd vs. Busan Industrial Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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