Correlation Between WinMate Communication and Mega Financial
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and Mega Financial 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 Mega Financial 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 Mega Financial Holding, you can compare the effects of market volatilities on WinMate Communication and Mega Financial 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 Mega Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Mega Financial.
Diversification Opportunities for WinMate Communication and Mega Financial
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WinMate and Mega is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Mega Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Financial Holding 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 Mega Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Financial Holding has no effect on the direction of WinMate Communication i.e., WinMate Communication and Mega Financial go up and down completely randomly.
Pair Corralation between WinMate Communication and Mega Financial
Assuming the 90 days trading horizon WinMate Communication INC is expected to generate 3.91 times more return on investment than Mega Financial. However, WinMate Communication is 3.91 times more volatile than Mega Financial Holding. It trades about 0.14 of its potential returns per unit of risk. Mega Financial Holding is currently generating about -0.03 per unit of risk. If you would invest 15,550 in WinMate Communication INC on October 26, 2024 and sell it today you would earn a total of 1,100 from holding WinMate Communication INC or generate 7.07% 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. Mega Financial Holding
Performance |
| Timeline |
| WinMate Communication INC |
| Mega Financial Holding |
WinMate Communication and Mega Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WinMate Communication and Mega Financial
The main advantage of trading using opposite WinMate Communication and Mega Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, Mega Financial 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 Mega Financial will offset losses from the drop in Mega Financial's long position.| WinMate Communication vs. Advantech Co | WinMate Communication vs. IEI Integration Corp | WinMate Communication vs. Flytech Technology Co | WinMate Communication vs. Ennoconn Corp |
| Mega Financial vs. CTBC Financial Holding | Mega Financial vs. Fubon Financial Holding | Mega Financial vs. First Financial Holding | Mega Financial vs. Cathay Financial Holding |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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