Correlation Between Wanhwa Enterprise and Chainqui Construction
Can any of the company-specific risk be diversified away by investing in both Wanhwa Enterprise and Chainqui Construction 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 Wanhwa Enterprise and Chainqui Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wanhwa Enterprise Co and Chainqui Construction Development, you can compare the effects of market volatilities on Wanhwa Enterprise and Chainqui Construction 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 Wanhwa Enterprise with a short position of Chainqui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wanhwa Enterprise and Chainqui Construction.
Diversification Opportunities for Wanhwa Enterprise and Chainqui Construction
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wanhwa and Chainqui is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wanhwa Enterprise Co and Chainqui Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainqui Construction and Wanhwa Enterprise 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 Wanhwa Enterprise Co are associated (or correlated) with Chainqui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainqui Construction has no effect on the direction of Wanhwa Enterprise i.e., Wanhwa Enterprise and Chainqui Construction go up and down completely randomly.
Pair Corralation between Wanhwa Enterprise and Chainqui Construction
Assuming the 90 days trading horizon Wanhwa Enterprise Co is expected to generate 0.24 times more return on investment than Chainqui Construction. However, Wanhwa Enterprise Co is 4.1 times less risky than Chainqui Construction. It trades about 0.03 of its potential returns per unit of risk. Chainqui Construction Development is currently generating about -0.16 per unit of risk. If you would invest 1,275 in Wanhwa Enterprise Co on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Wanhwa Enterprise Co or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wanhwa Enterprise Co vs. Chainqui Construction Developm
Performance |
| Timeline |
| Wanhwa Enterprise |
| Chainqui Construction |
Wanhwa Enterprise and Chainqui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wanhwa Enterprise and Chainqui Construction
The main advantage of trading using opposite Wanhwa Enterprise and Chainqui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wanhwa Enterprise position performs unexpectedly, Chainqui Construction 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 Chainqui Construction will offset losses from the drop in Chainqui Construction's long position.| Wanhwa Enterprise vs. Chainqui Construction Development | Wanhwa Enterprise vs. Zinwell | Wanhwa Enterprise vs. Symtek Automation Asia | Wanhwa Enterprise vs. CTCI Corp |
| Chainqui Construction vs. Sunny Friend Environmental | Chainqui Construction vs. TTET Union Corp | Chainqui Construction vs. ECOVE Environment Corp | Chainqui Construction vs. Yulon Finance Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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