Correlation Between WinMate Communication and China Airlines
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and China Airlines 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 China Airlines 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 China Airlines, you can compare the effects of market volatilities on WinMate Communication and China Airlines 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 China Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and China Airlines.
Diversification Opportunities for WinMate Communication and China Airlines
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WinMate and China is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and China Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Airlines 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 China Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Airlines has no effect on the direction of WinMate Communication i.e., WinMate Communication and China Airlines go up and down completely randomly.
Pair Corralation between WinMate Communication and China Airlines
Assuming the 90 days trading horizon WinMate Communication INC is expected to generate 2.4 times more return on investment than China Airlines. However, WinMate Communication is 2.4 times more volatile than China Airlines. It trades about 0.2 of its potential returns per unit of risk. China Airlines is currently generating about -0.29 per unit of risk. If you would invest 15,900 in WinMate Communication INC on November 29, 2024 and sell it today you would earn a total of 1,400 from holding WinMate Communication INC or generate 8.81% 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. China Airlines
Performance |
| Timeline |
| WinMate Communication INC |
| China Airlines |
WinMate Communication and China Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WinMate Communication and China Airlines
The main advantage of trading using opposite WinMate Communication and China Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, China Airlines 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 China Airlines will offset losses from the drop in China Airlines' long position.| WinMate Communication vs. Advantech Co | WinMate Communication vs. IEI Integration Corp | WinMate Communication vs. Flytech Technology Co | WinMate Communication vs. Ennoconn Corp |
| China Airlines vs. Eva Airways Corp | China Airlines vs. Evergreen Marine Corp | China Airlines vs. Yang Ming Marine | China Airlines vs. China Steel 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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