Correlation Between Zenitron Corp and Weikeng Industrial
Can any of the company-specific risk be diversified away by investing in both Zenitron Corp and Weikeng Industrial 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 Zenitron Corp and Weikeng Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zenitron Corp and Weikeng Industrial Co, you can compare the effects of market volatilities on Zenitron Corp and Weikeng Industrial 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 Zenitron Corp with a short position of Weikeng Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zenitron Corp and Weikeng Industrial.
Diversification Opportunities for Zenitron Corp and Weikeng Industrial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zenitron and Weikeng is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zenitron Corp and Weikeng Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weikeng Industrial and Zenitron Corp 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 Zenitron Corp are associated (or correlated) with Weikeng Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weikeng Industrial has no effect on the direction of Zenitron Corp i.e., Zenitron Corp and Weikeng Industrial go up and down completely randomly.
Pair Corralation between Zenitron Corp and Weikeng Industrial
Assuming the 90 days trading horizon Zenitron Corp is expected to under-perform the Weikeng Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Zenitron Corp is 1.77 times less risky than Weikeng Industrial. The stock trades about -0.5 of its potential returns per unit of risk. The Weikeng Industrial Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,400 in Weikeng Industrial Co on September 15, 2024 and sell it today you would lose (25.00) from holding Weikeng Industrial Co or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zenitron Corp vs. Weikeng Industrial Co
Performance |
| Timeline |
| Zenitron Corp |
| Weikeng Industrial |
Zenitron Corp and Weikeng Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zenitron Corp and Weikeng Industrial
The main advantage of trading using opposite Zenitron Corp and Weikeng Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zenitron Corp position performs unexpectedly, Weikeng Industrial 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 Weikeng Industrial will offset losses from the drop in Weikeng Industrial's long position.| Zenitron Corp vs. Weikeng Industrial Co | Zenitron Corp vs. WT Microelectronics Co | Zenitron Corp vs. Edom Technology Co | Zenitron Corp vs. Wah Lee Industrial |
| Weikeng Industrial vs. AU Optronics | Weikeng Industrial vs. Innolux Corp | Weikeng Industrial vs. Ruentex Development Co | Weikeng Industrial vs. WiseChip Semiconductor |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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