Correlation Between Weikeng Industrial and Zenitron Corp
Can any of the company-specific risk be diversified away by investing in both Weikeng Industrial and Zenitron Corp 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 Weikeng Industrial and Zenitron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weikeng Industrial Co and Zenitron Corp, you can compare the effects of market volatilities on Weikeng Industrial and Zenitron Corp 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 Weikeng Industrial with a short position of Zenitron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weikeng Industrial and Zenitron Corp.
Diversification Opportunities for Weikeng Industrial and Zenitron Corp
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weikeng and Zenitron is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Weikeng Industrial Co and Zenitron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zenitron Corp and Weikeng Industrial 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 Weikeng Industrial Co are associated (or correlated) with Zenitron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zenitron Corp has no effect on the direction of Weikeng Industrial i.e., Weikeng Industrial and Zenitron Corp go up and down completely randomly.
Pair Corralation between Weikeng Industrial and Zenitron Corp
Assuming the 90 days trading horizon Weikeng Industrial Co is expected to generate 1.95 times more return on investment than Zenitron Corp. However, Weikeng Industrial is 1.95 times more volatile than Zenitron Corp. It trades about 0.04 of its potential returns per unit of risk. Zenitron Corp is currently generating about -0.05 per unit of risk. If you would invest 2,875 in Weikeng Industrial Co on September 14, 2024 and sell it today you would earn a total of 540.00 from holding Weikeng Industrial Co or generate 18.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weikeng Industrial Co vs. Zenitron Corp
Performance |
| Timeline |
| Weikeng Industrial |
| Zenitron Corp |
Weikeng Industrial and Zenitron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weikeng Industrial and Zenitron Corp
The main advantage of trading using opposite Weikeng Industrial and Zenitron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weikeng Industrial position performs unexpectedly, Zenitron Corp 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 Zenitron Corp will offset losses from the drop in Zenitron Corp's long position.| Weikeng Industrial vs. Zenitron Corp | Weikeng Industrial vs. WT Microelectronics Co | Weikeng Industrial vs. Edom Technology Co | Weikeng Industrial vs. Wah Lee Industrial |
| Zenitron Corp vs. Weikeng Industrial Co | Zenitron Corp vs. WT Microelectronics Co | Zenitron Corp vs. Edom Technology Co | Zenitron Corp vs. Wah Lee Industrial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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