Correlation Between Great Wall and Wowprime Corp
Can any of the company-specific risk be diversified away by investing in both Great Wall and Wowprime Corp 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 Great Wall and Wowprime Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wall Enterprise and Wowprime Corp, you can compare the effects of market volatilities on Great Wall and Wowprime Corp 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 Great Wall with a short position of Wowprime Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wall and Wowprime Corp.
Diversification Opportunities for Great Wall and Wowprime Corp
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Great and Wowprime is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Great Wall Enterprise and Wowprime Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wowprime Corp and Great Wall 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 Great Wall Enterprise are associated (or correlated) with Wowprime Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wowprime Corp has no effect on the direction of Great Wall i.e., Great Wall and Wowprime Corp go up and down completely randomly.
Pair Corralation between Great Wall and Wowprime Corp
Assuming the 90 days trading horizon Great Wall Enterprise is expected to under-perform the Wowprime Corp. But the stock apears to be less risky and, when comparing its historical volatility, Great Wall Enterprise is 1.63 times less risky than Wowprime Corp. The stock trades about -0.06 of its potential returns per unit of risk. The Wowprime Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 23,100 in Wowprime Corp on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Wowprime Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Great Wall Enterprise vs. Wowprime Corp
Performance |
| Timeline |
| Great Wall Enterprise |
| Wowprime Corp |
Great Wall and Wowprime Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wall and Wowprime Corp
The main advantage of trading using opposite Great Wall and Wowprime Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wall position performs unexpectedly, Wowprime Corp 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 Wowprime Corp will offset losses from the drop in Wowprime Corp's long position.| Great Wall vs. De Licacy Industrial | Great Wall vs. Wisher Industrial Co | Great Wall vs. Tainan Enterprises Co |
| Wowprime Corp vs. Gourmet Master Co | Wowprime Corp vs. President Chain Store | Wowprime Corp vs. Uni President Enterprises Corp | Wowprime Corp vs. Formosa International Hotels |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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