Correlation Between Wei Chuan and Emerging Display
Can any of the company-specific risk be diversified away by investing in both Wei Chuan and Emerging Display 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 Emerging Display 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 Emerging Display Technologies, you can compare the effects of market volatilities on Wei Chuan and Emerging Display 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 Emerging Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wei Chuan and Emerging Display.
Diversification Opportunities for Wei Chuan and Emerging Display
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wei and Emerging is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Wei Chuan Foods and Emerging Display Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Display Tec 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 Emerging Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Display Tec has no effect on the direction of Wei Chuan i.e., Wei Chuan and Emerging Display go up and down completely randomly.
Pair Corralation between Wei Chuan and Emerging Display
Assuming the 90 days trading horizon Wei Chuan Foods is expected to under-perform the Emerging Display. But the stock apears to be less risky and, when comparing its historical volatility, Wei Chuan Foods is 6.72 times less risky than Emerging Display. The stock trades about -0.12 of its potential returns per unit of risk. The Emerging Display Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,710 in Emerging Display Technologies on October 11, 2024 and sell it today you would earn a total of 15.00 from holding Emerging Display Technologies or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wei Chuan Foods vs. Emerging Display Technologies
Performance |
| Timeline |
| Wei Chuan Foods |
| Emerging Display Tec |
Wei Chuan and Emerging Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wei Chuan and Emerging Display
The main advantage of trading using opposite Wei Chuan and Emerging Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wei Chuan position performs unexpectedly, Emerging Display 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 Emerging Display will offset losses from the drop in Emerging Display's long position.| Wei Chuan vs. TTET Union Corp | Wei Chuan vs. Lian Hwa Foods | Wei Chuan vs. Information Technology Total | Wei Chuan vs. Kinko Optical Co |
| Emerging Display vs. SciVision Biotech | Emerging Display vs. Wei Chuan Foods | Emerging Display vs. An Shin Food Services | Emerging Display vs. GeneReach Biotechnology |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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