Correlation Between Wistron Corp and Ardentec
Can any of the company-specific risk be diversified away by investing in both Wistron Corp and Ardentec 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 Ardentec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wistron Corp and Ardentec, you can compare the effects of market volatilities on Wistron Corp and Ardentec 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 Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron Corp and Ardentec.
Diversification Opportunities for Wistron Corp and Ardentec
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wistron and Ardentec is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Wistron Corp and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec 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 Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of Wistron Corp i.e., Wistron Corp and Ardentec go up and down completely randomly.
Pair Corralation between Wistron Corp and Ardentec
Assuming the 90 days trading horizon Wistron Corp is expected to generate 1.59 times less return on investment than Ardentec. In addition to that, Wistron Corp is 1.21 times more volatile than Ardentec. It trades about 0.02 of its total potential returns per unit of risk. Ardentec is currently generating about 0.03 per unit of volatility. If you would invest 5,920 in Ardentec on October 28, 2024 and sell it today you would earn a total of 970.00 from holding Ardentec or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron Corp vs. Ardentec
Performance |
| Timeline |
| Wistron Corp |
| Ardentec |
Wistron Corp and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron Corp and Ardentec
The main advantage of trading using opposite Wistron Corp and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron Corp position performs unexpectedly, Ardentec 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 Ardentec will offset losses from the drop in Ardentec's long position.| Wistron Corp vs. Pegatron Corp | Wistron Corp vs. Quanta Computer | Wistron Corp vs. Compal Electronics | Wistron Corp vs. Inventec Corp |
| Ardentec vs. Sports Gear Co | Ardentec vs. Emerging Display Technologies | Ardentec vs. TWOWAY Communications | Ardentec vs. U Ming Marine Transport |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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