Correlation Between Wintec and Coloray International
Can any of the company-specific risk be diversified away by investing in both Wintec and Coloray International 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 Wintec and Coloray International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wintec Co and Coloray International Investment, you can compare the effects of market volatilities on Wintec and Coloray International 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 Wintec with a short position of Coloray International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintec and Coloray International.
Diversification Opportunities for Wintec and Coloray International
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wintec and Coloray is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Wintec Co and Coloray International Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloray International and Wintec 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 Wintec Co are associated (or correlated) with Coloray International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloray International has no effect on the direction of Wintec i.e., Wintec and Coloray International go up and down completely randomly.
Pair Corralation between Wintec and Coloray International
Assuming the 90 days trading horizon Wintec Co is expected to generate 1.47 times more return on investment than Coloray International. However, Wintec is 1.47 times more volatile than Coloray International Investment. It trades about 0.06 of its potential returns per unit of risk. Coloray International Investment is currently generating about -0.23 per unit of risk. If you would invest 272,000 in Wintec Co on September 3, 2024 and sell it today you would earn a total of 10,000 from holding Wintec Co or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintec Co vs. Coloray International Investme
Performance |
| Timeline |
| Wintec |
| Coloray International |
Wintec and Coloray International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintec and Coloray International
The main advantage of trading using opposite Wintec and Coloray International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintec position performs unexpectedly, Coloray International 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 Coloray International will offset losses from the drop in Coloray International's long position.| Wintec vs. Sempio Foods Co | Wintec vs. Playgram Co | Wintec vs. Lotte Data Communication | Wintec vs. Haitai Confectionery Foods |
| Coloray International vs. LG Chem | Coloray International vs. DukSan Neolux CoLtd | Coloray International vs. Hyosung Chemical Corp | Coloray International vs. LIG ES SPAC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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