Correlation Between Wei Chuan and Est Global
Can any of the company-specific risk be diversified away by investing in both Wei Chuan and Est Global 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 Est Global 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 Est Global Apparel, you can compare the effects of market volatilities on Wei Chuan and Est Global 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 Est Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wei Chuan and Est Global.
Diversification Opportunities for Wei Chuan and Est Global
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wei and Est is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Wei Chuan Foods and Est Global Apparel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Est Global Apparel 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 Est Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Est Global Apparel has no effect on the direction of Wei Chuan i.e., Wei Chuan and Est Global go up and down completely randomly.
Pair Corralation between Wei Chuan and Est Global
Assuming the 90 days trading horizon Wei Chuan Foods is expected to under-perform the Est Global. But the stock apears to be less risky and, when comparing its historical volatility, Wei Chuan Foods is 4.39 times less risky than Est Global. The stock trades about -0.04 of its potential returns per unit of risk. The Est Global Apparel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,592 in Est Global Apparel on October 27, 2024 and sell it today you would earn a total of 123.00 from holding Est Global Apparel or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wei Chuan Foods vs. Est Global Apparel
Performance |
| Timeline |
| Wei Chuan Foods |
| Est Global Apparel |
Wei Chuan and Est Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wei Chuan and Est Global
The main advantage of trading using opposite Wei Chuan and Est Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wei Chuan position performs unexpectedly, Est Global 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 Est Global will offset losses from the drop in Est Global'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 |
| Est Global vs. Asmedia Technology | Est Global vs. Chicony Power Technology | Est Global vs. Oceanic Beverages Co | Est Global vs. Jentech Precision Industrial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets |