Correlation Between Chicony Electronics and Wah Lee
Can any of the company-specific risk be diversified away by investing in both Chicony Electronics and Wah Lee 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 Chicony Electronics and Wah Lee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicony Electronics Co and Wah Lee Industrial, you can compare the effects of market volatilities on Chicony Electronics and Wah Lee 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 Chicony Electronics with a short position of Wah Lee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicony Electronics and Wah Lee.
Diversification Opportunities for Chicony Electronics and Wah Lee
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chicony and Wah is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chicony Electronics Co and Wah Lee Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Lee Industrial and Chicony Electronics 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 Chicony Electronics Co are associated (or correlated) with Wah Lee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Lee Industrial has no effect on the direction of Chicony Electronics i.e., Chicony Electronics and Wah Lee go up and down completely randomly.
Pair Corralation between Chicony Electronics and Wah Lee
Assuming the 90 days trading horizon Chicony Electronics Co is expected to under-perform the Wah Lee. In addition to that, Chicony Electronics is 1.03 times more volatile than Wah Lee Industrial. It trades about -0.04 of its total potential returns per unit of risk. Wah Lee Industrial is currently generating about 0.01 per unit of volatility. If you would invest 12,400 in Wah Lee Industrial on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Wah Lee Industrial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicony Electronics Co vs. Wah Lee Industrial
Performance |
| Timeline |
| Chicony Electronics |
| Wah Lee Industrial |
Chicony Electronics and Wah Lee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicony Electronics and Wah Lee
The main advantage of trading using opposite Chicony Electronics and Wah Lee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicony Electronics position performs unexpectedly, Wah Lee 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 Wah Lee will offset losses from the drop in Wah Lee's long position.| Chicony Electronics vs. Lite On Technology Corp | Chicony Electronics vs. Inventec Corp | Chicony Electronics vs. Compal Electronics | Chicony Electronics vs. Synnex Technology International |
| Wah Lee vs. Huaku Development Co | Wah Lee vs. Topco Scientific Co | Wah Lee vs. Test Research | Wah Lee vs. Shinkong Insurance Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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