Correlation Between Wei Chuan and Wayi International
Can any of the company-specific risk be diversified away by investing in both Wei Chuan and Wayi International 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 Wayi International 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 Wayi International Digital, you can compare the effects of market volatilities on Wei Chuan and Wayi International 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 Wayi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wei Chuan and Wayi International.
Diversification Opportunities for Wei Chuan and Wayi International
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wei and Wayi is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Wei Chuan Foods and Wayi International Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayi International 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 Wayi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayi International has no effect on the direction of Wei Chuan i.e., Wei Chuan and Wayi International go up and down completely randomly.
Pair Corralation between Wei Chuan and Wayi International
If you would invest 0.00 in Wayi International Digital on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Wayi International Digital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.42% |
| Values | Daily Returns |
Wei Chuan Foods vs. Wayi International Digital
Performance |
| Timeline |
| Wei Chuan Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wayi International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wei Chuan and Wayi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wei Chuan and Wayi International
The main advantage of trading using opposite Wei Chuan and Wayi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wei Chuan position performs unexpectedly, Wayi International 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 Wayi International will offset losses from the drop in Wayi International's long position.The idea behind Wei Chuan Foods and Wayi International Digital 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.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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