Correlation Between Wistron Corp and Chicony Electronics
Can any of the company-specific risk be diversified away by investing in both Wistron Corp and Chicony Electronics 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 Wistron Corp and Chicony Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wistron Corp and Chicony Electronics Co, you can compare the effects of market volatilities on Wistron Corp and Chicony Electronics 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 Wistron Corp with a short position of Chicony Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron Corp and Chicony Electronics.
Diversification Opportunities for Wistron Corp and Chicony Electronics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wistron and Chicony is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Wistron Corp and Chicony Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Electronics and Wistron 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 Wistron Corp are associated (or correlated) with Chicony Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Electronics has no effect on the direction of Wistron Corp i.e., Wistron Corp and Chicony Electronics go up and down completely randomly.
Pair Corralation between Wistron Corp and Chicony Electronics
Assuming the 90 days trading horizon Wistron Corp is expected to generate 1.43 times more return on investment than Chicony Electronics. However, Wistron Corp is 1.43 times more volatile than Chicony Electronics Co. It trades about -0.01 of its potential returns per unit of risk. Chicony Electronics Co is currently generating about -0.12 per unit of risk. If you would invest 11,500 in Wistron Corp on September 2, 2024 and sell it today you would lose (150.00) from holding Wistron Corp or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron Corp vs. Chicony Electronics Co
Performance |
| Timeline |
| Wistron Corp |
| Chicony Electronics |
Wistron Corp and Chicony Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron Corp and Chicony Electronics
The main advantage of trading using opposite Wistron Corp and Chicony Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron Corp position performs unexpectedly, Chicony Electronics 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 Chicony Electronics will offset losses from the drop in Chicony Electronics' long position.| Wistron Corp vs. Pegatron Corp | Wistron Corp vs. Quanta Computer | Wistron Corp vs. Compal Electronics | Wistron Corp vs. Inventec 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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