Correlation Between Wei Chuan and AGV Products
Can any of the company-specific risk be diversified away by investing in both Wei Chuan and AGV Products 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 Wei Chuan and AGV Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wei Chuan Foods and AGV Products Corp, you can compare the effects of market volatilities on Wei Chuan and AGV Products 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 Wei Chuan with a short position of AGV Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wei Chuan and AGV Products.
Diversification Opportunities for Wei Chuan and AGV Products
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wei and AGV is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Wei Chuan Foods and AGV Products Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGV Products Corp and Wei Chuan 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 Wei Chuan Foods are associated (or correlated) with AGV Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGV Products Corp has no effect on the direction of Wei Chuan i.e., Wei Chuan and AGV Products go up and down completely randomly.
Pair Corralation between Wei Chuan and AGV Products
Assuming the 90 days trading horizon Wei Chuan Foods is expected to generate 0.69 times more return on investment than AGV Products. However, Wei Chuan Foods is 1.45 times less risky than AGV Products. It trades about 0.0 of its potential returns per unit of risk. AGV Products Corp is currently generating about -0.07 per unit of risk. If you would invest 1,785 in Wei Chuan Foods on October 31, 2024 and sell it today you would earn a total of 0.00 from holding Wei Chuan Foods or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wei Chuan Foods vs. AGV Products Corp
Performance |
| Timeline |
| Wei Chuan Foods |
| AGV Products Corp |
Wei Chuan and AGV Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wei Chuan and AGV Products
The main advantage of trading using opposite Wei Chuan and AGV Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wei Chuan position performs unexpectedly, AGV Products 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 AGV Products will offset losses from the drop in AGV Products' long position.| Wei Chuan vs. Uni President Enterprises Corp | Wei Chuan vs. Taisun Enterprise Co | Wei Chuan vs. AGV Products Corp | Wei Chuan vs. Great Wall Enterprise |
| AGV Products vs. Uni President Enterprises Corp | AGV Products vs. Taisun Enterprise Co | AGV Products vs. Great Wall Enterprise | AGV Products vs. Chia Hsin Cement |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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