Correlation Between WT Microelectronics and Celxpert Energy
Can any of the company-specific risk be diversified away by investing in both WT Microelectronics and Celxpert Energy 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 WT Microelectronics and Celxpert Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT Microelectronics Co and Celxpert Energy, you can compare the effects of market volatilities on WT Microelectronics and Celxpert Energy 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 WT Microelectronics with a short position of Celxpert Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT Microelectronics and Celxpert Energy.
Diversification Opportunities for WT Microelectronics and Celxpert Energy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 3036A and Celxpert is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding WT Microelectronics Co and Celxpert Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celxpert Energy and WT Microelectronics 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 WT Microelectronics Co are associated (or correlated) with Celxpert Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celxpert Energy has no effect on the direction of WT Microelectronics i.e., WT Microelectronics and Celxpert Energy go up and down completely randomly.
Pair Corralation between WT Microelectronics and Celxpert Energy
Assuming the 90 days trading horizon WT Microelectronics is expected to generate 5.67 times less return on investment than Celxpert Energy. But when comparing it to its historical volatility, WT Microelectronics Co is 45.27 times less risky than Celxpert Energy. It trades about 0.77 of its potential returns per unit of risk. Celxpert Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,435 in Celxpert Energy on October 25, 2024 and sell it today you would earn a total of 215.00 from holding Celxpert Energy or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WT Microelectronics Co vs. Celxpert Energy
Performance |
| Timeline |
| WT Microelectronics |
| Celxpert Energy |
WT Microelectronics and Celxpert Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WT Microelectronics and Celxpert Energy
The main advantage of trading using opposite WT Microelectronics and Celxpert Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT Microelectronics position performs unexpectedly, Celxpert Energy 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 Celxpert Energy will offset losses from the drop in Celxpert Energy's long position.| WT Microelectronics vs. PChome Online | WT Microelectronics vs. Taiwan Speciality Chemicals | WT Microelectronics vs. Thermaltake Technology Co | WT Microelectronics vs. Formosa Chemicals Fibre |
| Celxpert Energy vs. Eastern Media International | Celxpert Energy vs. Tehmag Foods | Celxpert Energy vs. Lian Hwa Foods | Celxpert Energy vs. PChome Online |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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