Correlation Between Wistron Corp and Coretronic
Can any of the company-specific risk be diversified away by investing in both Wistron Corp and Coretronic 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 Coretronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wistron Corp and Coretronic, you can compare the effects of market volatilities on Wistron Corp and Coretronic 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 Coretronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron Corp and Coretronic.
Diversification Opportunities for Wistron Corp and Coretronic
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wistron and Coretronic is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wistron Corp and Coretronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coretronic 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 Coretronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coretronic has no effect on the direction of Wistron Corp i.e., Wistron Corp and Coretronic go up and down completely randomly.
Pair Corralation between Wistron Corp and Coretronic
Assuming the 90 days trading horizon Wistron Corp is expected to generate 1.28 times more return on investment than Coretronic. However, Wistron Corp is 1.28 times more volatile than Coretronic. It trades about 0.11 of its potential returns per unit of risk. Coretronic is currently generating about 0.05 per unit of risk. If you would invest 2,890 in Wistron Corp on September 3, 2024 and sell it today you would earn a total of 8,460 from holding Wistron Corp or generate 292.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron Corp vs. Coretronic
Performance |
| Timeline |
| Wistron Corp |
| Coretronic |
Wistron Corp and Coretronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron Corp and Coretronic
The main advantage of trading using opposite Wistron Corp and Coretronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron Corp position performs unexpectedly, Coretronic 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 Coretronic will offset losses from the drop in Coretronic'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 |
| Coretronic vs. WiseChip Semiconductor | Coretronic vs. Novatek Microelectronics Corp | Coretronic vs. Leader Electronics | Coretronic vs. Information Technology Total |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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