Correlation Between Cheng Uei and Zinwell
Can any of the company-specific risk be diversified away by investing in both Cheng Uei and Zinwell 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 Cheng Uei and Zinwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheng Uei Precision and Zinwell, you can compare the effects of market volatilities on Cheng Uei and Zinwell 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 Cheng Uei with a short position of Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Uei and Zinwell.
Diversification Opportunities for Cheng Uei and Zinwell
Good diversification
The 3 months correlation between Cheng and Zinwell is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Uei Precision and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell and Cheng Uei 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 Cheng Uei Precision are associated (or correlated) with Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Cheng Uei i.e., Cheng Uei and Zinwell go up and down completely randomly.
Pair Corralation between Cheng Uei and Zinwell
Assuming the 90 days trading horizon Cheng Uei Precision is expected to under-perform the Zinwell. But the stock apears to be less risky and, when comparing its historical volatility, Cheng Uei Precision is 1.16 times less risky than Zinwell. The stock trades about -0.18 of its potential returns per unit of risk. The Zinwell is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,565 in Zinwell on October 21, 2024 and sell it today you would lose (105.00) from holding Zinwell or give up 6.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheng Uei Precision vs. Zinwell
Performance |
| Timeline |
| Cheng Uei Precision |
| Zinwell |
Cheng Uei and Zinwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheng Uei and Zinwell
The main advantage of trading using opposite Cheng Uei and Zinwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheng Uei position performs unexpectedly, Zinwell 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 Zinwell will offset losses from the drop in Zinwell's long position.| Cheng Uei vs. ASRock Inc | Cheng Uei vs. FIC Global | Cheng Uei vs. In Win Development | Cheng Uei vs. Getac Technology Corp |
| Zinwell vs. Clevo Co | Zinwell vs. D Link Corp | Zinwell vs. Cheng Uei Precision | Zinwell vs. Senao International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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