Correlation Between Century Wind and Wafer Works
Can any of the company-specific risk be diversified away by investing in both Century Wind and Wafer Works 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 Century Wind and Wafer Works into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Wind Power and Wafer Works, you can compare the effects of market volatilities on Century Wind and Wafer Works 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 Century Wind with a short position of Wafer Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and Wafer Works.
Diversification Opportunities for Century Wind and Wafer Works
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Wafer is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and Wafer Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wafer Works and Century Wind 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 Century Wind Power are associated (or correlated) with Wafer Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wafer Works has no effect on the direction of Century Wind i.e., Century Wind and Wafer Works go up and down completely randomly.
Pair Corralation between Century Wind and Wafer Works
Assuming the 90 days trading horizon Century Wind Power is expected to generate 1.55 times more return on investment than Wafer Works. However, Century Wind is 1.55 times more volatile than Wafer Works. It trades about 0.06 of its potential returns per unit of risk. Wafer Works is currently generating about -0.06 per unit of risk. If you would invest 13,975 in Century Wind Power on December 12, 2024 and sell it today you would earn a total of 12,825 from holding Century Wind Power or generate 91.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Century Wind Power vs. Wafer Works
Performance |
| Timeline |
| Century Wind Power |
| Wafer Works |
Century Wind and Wafer Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Wind and Wafer Works
The main advantage of trading using opposite Century Wind and Wafer Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Wind position performs unexpectedly, Wafer Works 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 Wafer Works will offset losses from the drop in Wafer Works' long position.| Century Wind vs. Kings Town Bank | ||
| Century Wind vs. Cathay Financial Holding | ||
| Century Wind vs. I Hwa Industrial Co | ||
| Century Wind vs. Shanghai Commercial Savings |
| Wafer Works vs. Sino American Silicon Products | ||
| Wafer Works vs. GlobalWafers Co | ||
| Wafer Works vs. Motech Industries Co | ||
| Wafer Works vs. Formosa Sumco Technology |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |