Correlation Between Wei Chuan and New Advanced
Can any of the company-specific risk be diversified away by investing in both Wei Chuan and New Advanced 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 New Advanced 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 New Advanced Electronics, you can compare the effects of market volatilities on Wei Chuan and New Advanced 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 New Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wei Chuan and New Advanced.
Diversification Opportunities for Wei Chuan and New Advanced
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wei and New is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Wei Chuan Foods and New Advanced Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Advanced Electronics 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 New Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Advanced Electronics has no effect on the direction of Wei Chuan i.e., Wei Chuan and New Advanced go up and down completely randomly.
Pair Corralation between Wei Chuan and New Advanced
Assuming the 90 days trading horizon Wei Chuan Foods is expected to generate 0.32 times more return on investment than New Advanced. However, Wei Chuan Foods is 3.12 times less risky than New Advanced. It trades about -0.01 of its potential returns per unit of risk. New Advanced Electronics is currently generating about -0.04 per unit of risk. If you would invest 1,925 in Wei Chuan Foods on September 3, 2024 and sell it today you would lose (95.00) from holding Wei Chuan Foods or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wei Chuan Foods vs. New Advanced Electronics
Performance |
| Timeline |
| Wei Chuan Foods |
| New Advanced Electronics |
Wei Chuan and New Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wei Chuan and New Advanced
The main advantage of trading using opposite Wei Chuan and New Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wei Chuan position performs unexpectedly, New Advanced 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 New Advanced will offset losses from the drop in New Advanced's long position.| Wei Chuan vs. Standard Foods Corp | Wei Chuan vs. TTET Union Corp | Wei Chuan vs. Uni President Enterprises Corp | Wei Chuan vs. Charoen Pokphand Enterprise |
| New Advanced vs. Wei Chuan Foods | New Advanced vs. SS Healthcare Holding | New Advanced vs. Tehmag Foods | New Advanced vs. First Insurance 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |