Correlation Between Wei Chuan and Macroblock
Can any of the company-specific risk be diversified away by investing in both Wei Chuan and Macroblock 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 Macroblock 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 Macroblock, you can compare the effects of market volatilities on Wei Chuan and Macroblock 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 Macroblock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wei Chuan and Macroblock.
Diversification Opportunities for Wei Chuan and Macroblock
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wei and Macroblock is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Wei Chuan Foods and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock 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 Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of Wei Chuan i.e., Wei Chuan and Macroblock go up and down completely randomly.
Pair Corralation between Wei Chuan and Macroblock
Assuming the 90 days trading horizon Wei Chuan Foods is expected to under-perform the Macroblock. But the stock apears to be less risky and, when comparing its historical volatility, Wei Chuan Foods is 5.38 times less risky than Macroblock. The stock trades about -0.25 of its potential returns per unit of risk. The Macroblock is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,100 in Macroblock on October 9, 2024 and sell it today you would earn a total of 250.00 from holding Macroblock or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wei Chuan Foods vs. Macroblock
Performance |
| Timeline |
| Wei Chuan Foods |
| Macroblock |
Wei Chuan and Macroblock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wei Chuan and Macroblock
The main advantage of trading using opposite Wei Chuan and Macroblock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wei Chuan position performs unexpectedly, Macroblock 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 Macroblock will offset losses from the drop in Macroblock's 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 |
| Macroblock vs. Taiwan Semiconductor Manufacturing | Macroblock vs. MediaTek | Macroblock vs. United Microelectronics | Macroblock vs. Novatek Microelectronics Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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