Correlation Between Wistron Corp and Jia Jie
Can any of the company-specific risk be diversified away by investing in both Wistron Corp and Jia Jie 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 Jia Jie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wistron Corp and Jia Jie Biomedical, you can compare the effects of market volatilities on Wistron Corp and Jia Jie 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 Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron Corp and Jia Jie.
Diversification Opportunities for Wistron Corp and Jia Jie
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wistron and Jia is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Wistron Corp and Jia Jie Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jia Jie Biomedical 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 Jia Jie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jia Jie Biomedical has no effect on the direction of Wistron Corp i.e., Wistron Corp and Jia Jie go up and down completely randomly.
Pair Corralation between Wistron Corp and Jia Jie
Assuming the 90 days trading horizon Wistron Corp is expected to generate 1.45 times more return on investment than Jia Jie. However, Wistron Corp is 1.45 times more volatile than Jia Jie Biomedical. It trades about -0.02 of its potential returns per unit of risk. Jia Jie Biomedical is currently generating about -0.14 per unit of risk. If you would invest 11,600 in Wistron Corp on September 3, 2024 and sell it today you would lose (200.00) from holding Wistron Corp or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron Corp vs. Jia Jie Biomedical
Performance |
| Timeline |
| Wistron Corp |
| Jia Jie Biomedical |
Wistron Corp and Jia Jie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron Corp and Jia Jie
The main advantage of trading using opposite Wistron Corp and Jia Jie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron Corp position performs unexpectedly, Jia Jie 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 Jia Jie will offset losses from the drop in Jia Jie's long position.| Wistron Corp vs. Taiwan Semiconductor Manufacturing | Wistron Corp vs. Yang Ming Marine | Wistron Corp vs. ASE Industrial Holding | Wistron Corp vs. AU Optronics |
| Jia Jie vs. Uni President Enterprises Corp | Jia Jie vs. Lien Hwa Industrial | Jia Jie vs. Great Wall Enterprise | Jia Jie vs. Standard Foods 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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