Correlation Between IEI Integration and Wah Hong
Can any of the company-specific risk be diversified away by investing in both IEI Integration and Wah Hong 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 IEI Integration and Wah Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IEI Integration Corp and Wah Hong Industrial, you can compare the effects of market volatilities on IEI Integration and Wah Hong 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 IEI Integration with a short position of Wah Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of IEI Integration and Wah Hong.
Diversification Opportunities for IEI Integration and Wah Hong
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IEI and Wah is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding IEI Integration Corp and Wah Hong Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Hong Industrial and IEI Integration 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 IEI Integration Corp are associated (or correlated) with Wah Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Hong Industrial has no effect on the direction of IEI Integration i.e., IEI Integration and Wah Hong go up and down completely randomly.
Pair Corralation between IEI Integration and Wah Hong
Assuming the 90 days trading horizon IEI Integration Corp is expected to generate 0.59 times more return on investment than Wah Hong. However, IEI Integration Corp is 1.69 times less risky than Wah Hong. It trades about -0.03 of its potential returns per unit of risk. Wah Hong Industrial is currently generating about -0.14 per unit of risk. If you would invest 7,850 in IEI Integration Corp on October 25, 2024 and sell it today you would lose (90.00) from holding IEI Integration Corp or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IEI Integration Corp vs. Wah Hong Industrial
Performance |
| Timeline |
| IEI Integration Corp |
| Wah Hong Industrial |
IEI Integration and Wah Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IEI Integration and Wah Hong
The main advantage of trading using opposite IEI Integration and Wah Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IEI Integration position performs unexpectedly, Wah Hong 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 Hong will offset losses from the drop in Wah Hong's long position.| IEI Integration vs. Advantech Co | IEI Integration vs. Getac Technology Corp | IEI Integration vs. Flytech Technology Co | IEI Integration vs. ADLINK Technology |
| Wah Hong vs. Advantech Co | Wah Hong vs. IEI Integration Corp | Wah Hong vs. Flytech Technology Co | Wah Hong vs. Ennoconn 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 Stocks Directory module to find actively traded stocks across global markets.
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