Correlation Between Techwing and DataSolution
Can any of the company-specific risk be diversified away by investing in both Techwing and DataSolution 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 Techwing and DataSolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techwing and DataSolution, you can compare the effects of market volatilities on Techwing and DataSolution 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 Techwing with a short position of DataSolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techwing and DataSolution.
Diversification Opportunities for Techwing and DataSolution
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Techwing and DataSolution is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Techwing and DataSolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DataSolution and Techwing 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 Techwing are associated (or correlated) with DataSolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DataSolution has no effect on the direction of Techwing i.e., Techwing and DataSolution go up and down completely randomly.
Pair Corralation between Techwing and DataSolution
Assuming the 90 days trading horizon Techwing is expected to generate 1.2 times more return on investment than DataSolution. However, Techwing is 1.2 times more volatile than DataSolution. It trades about 0.12 of its potential returns per unit of risk. DataSolution is currently generating about -0.01 per unit of risk. If you would invest 627,556 in Techwing on October 28, 2024 and sell it today you would earn a total of 4,322,444 from holding Techwing or generate 688.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Techwing vs. DataSolution
Performance |
| Timeline |
| Techwing |
| DataSolution |
Techwing and DataSolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Techwing and DataSolution
The main advantage of trading using opposite Techwing and DataSolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techwing position performs unexpectedly, DataSolution 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 DataSolution will offset losses from the drop in DataSolution's long position.| Techwing vs. Korea Information Engineering | Techwing vs. FoodNamoo | Techwing vs. Haitai Confectionery Foods | Techwing vs. Insung Information Co |
| DataSolution vs. Samsung Electronics Co | DataSolution vs. Samsung Electronics Co | DataSolution vs. LG Energy Solution | DataSolution vs. SK Hynix |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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