Correlation Between Kingstate Electronics and Wiwynn Corp
Can any of the company-specific risk be diversified away by investing in both Kingstate Electronics and Wiwynn 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 Kingstate Electronics and Wiwynn Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingstate Electronics and Wiwynn Corp, you can compare the effects of market volatilities on Kingstate Electronics and Wiwynn 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 Kingstate Electronics with a short position of Wiwynn Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingstate Electronics and Wiwynn Corp.
Diversification Opportunities for Kingstate Electronics and Wiwynn Corp
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kingstate and Wiwynn is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kingstate Electronics and Wiwynn Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wiwynn Corp and Kingstate Electronics 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 Kingstate Electronics are associated (or correlated) with Wiwynn Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wiwynn Corp has no effect on the direction of Kingstate Electronics i.e., Kingstate Electronics and Wiwynn Corp go up and down completely randomly.
Pair Corralation between Kingstate Electronics and Wiwynn Corp
Assuming the 90 days trading horizon Kingstate Electronics is expected to under-perform the Wiwynn Corp. But the stock apears to be less risky and, when comparing its historical volatility, Kingstate Electronics is 1.44 times less risky than Wiwynn Corp. The stock trades about -0.23 of its potential returns per unit of risk. The Wiwynn Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 197,000 in Wiwynn Corp on August 27, 2024 and sell it today you would earn a total of 16,000 from holding Wiwynn Corp or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingstate Electronics vs. Wiwynn Corp
Performance |
| Timeline |
| Kingstate Electronics |
| Wiwynn Corp |
Kingstate Electronics and Wiwynn Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingstate Electronics and Wiwynn Corp
The main advantage of trading using opposite Kingstate Electronics and Wiwynn Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingstate Electronics position performs unexpectedly, Wiwynn 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 Wiwynn Corp will offset losses from the drop in Wiwynn Corp's long position.| Kingstate Electronics vs. Taiwan Speciality Chemicals | Kingstate Electronics vs. Sports Gear Co | Kingstate Electronics vs. Hsinli Chemical Industrial | Kingstate Electronics vs. Oceanic Beverages Co |
| Wiwynn Corp vs. Aspeed Technology | Wiwynn Corp vs. Unimicron Technology Corp | Wiwynn Corp vs. Asmedia Technology | Wiwynn Corp vs. Novatek Microelectronics 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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