Correlation Between Wei Chuan and Antec
Can any of the company-specific risk be diversified away by investing in both Wei Chuan and Antec 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 Antec 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 Antec Inc, you can compare the effects of market volatilities on Wei Chuan and Antec 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 Antec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wei Chuan and Antec.
Diversification Opportunities for Wei Chuan and Antec
Good diversification
The 3 months correlation between Wei and Antec is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Wei Chuan Foods and Antec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antec Inc 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 Antec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antec Inc has no effect on the direction of Wei Chuan i.e., Wei Chuan and Antec go up and down completely randomly.
Pair Corralation between Wei Chuan and Antec
Assuming the 90 days trading horizon Wei Chuan Foods is expected to generate 0.2 times more return on investment than Antec. However, Wei Chuan Foods is 5.11 times less risky than Antec. It trades about 0.03 of its potential returns per unit of risk. Antec Inc is currently generating about -0.16 per unit of risk. If you would invest 1,790 in Wei Chuan Foods on September 15, 2024 and sell it today you would earn a total of 5.00 from holding Wei Chuan Foods or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wei Chuan Foods vs. Antec Inc
Performance |
| Timeline |
| Wei Chuan Foods |
| Antec Inc |
Wei Chuan and Antec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wei Chuan and Antec
The main advantage of trading using opposite Wei Chuan and Antec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wei Chuan position performs unexpectedly, Antec 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 Antec will offset losses from the drop in Antec'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 |
| Antec vs. Wei Chuan Foods | Antec vs. WiseChip Semiconductor | Antec vs. Compal Broadband Networks | Antec vs. Elite Semiconductor Memory |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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