Correlation Between WinMate Communication and Hon Hai
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and Hon Hai 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 WinMate Communication and Hon Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WinMate Communication INC and Hon Hai Precision, you can compare the effects of market volatilities on WinMate Communication and Hon Hai 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 WinMate Communication with a short position of Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Hon Hai.
Diversification Opportunities for WinMate Communication and Hon Hai
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between WinMate and Hon is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision and WinMate Communication 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 WinMate Communication INC are associated (or correlated) with Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of WinMate Communication i.e., WinMate Communication and Hon Hai go up and down completely randomly.
Pair Corralation between WinMate Communication and Hon Hai
Assuming the 90 days trading horizon WinMate Communication is expected to generate 2.46 times less return on investment than Hon Hai. But when comparing it to its historical volatility, WinMate Communication INC is 1.26 times less risky than Hon Hai. It trades about 0.06 of its potential returns per unit of risk. Hon Hai Precision is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,640 in Hon Hai Precision on September 1, 2024 and sell it today you would earn a total of 9,910 from holding Hon Hai Precision or generate 102.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WinMate Communication INC vs. Hon Hai Precision
Performance |
| Timeline |
| WinMate Communication INC |
| Hon Hai Precision |
WinMate Communication and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WinMate Communication and Hon Hai
The main advantage of trading using opposite WinMate Communication and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.| WinMate Communication vs. Hon Hai Precision | WinMate Communication vs. Delta Electronics | WinMate Communication vs. LARGAN Precision Co | WinMate Communication vs. Yageo Corp |
| Hon Hai vs. United Microelectronics | Hon Hai vs. MediaTek | Hon Hai vs. Chunghwa Telecom Co | Hon Hai vs. Delta Electronics |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |