Correlation Between WinMate Communication and Joinsoon Electronics
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and Joinsoon Electronics 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 Joinsoon Electronics 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 Joinsoon Electronics MFG, you can compare the effects of market volatilities on WinMate Communication and Joinsoon Electronics 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 Joinsoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Joinsoon Electronics.
Diversification Opportunities for WinMate Communication and Joinsoon Electronics
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WinMate and Joinsoon is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Joinsoon Electronics MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joinsoon Electronics MFG 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 Joinsoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joinsoon Electronics MFG has no effect on the direction of WinMate Communication i.e., WinMate Communication and Joinsoon Electronics go up and down completely randomly.
Pair Corralation between WinMate Communication and Joinsoon Electronics
Assuming the 90 days trading horizon WinMate Communication INC is expected to generate 0.61 times more return on investment than Joinsoon Electronics. However, WinMate Communication INC is 1.65 times less risky than Joinsoon Electronics. It trades about 0.06 of its potential returns per unit of risk. Joinsoon Electronics MFG is currently generating about -0.08 per unit of risk. If you would invest 14,900 in WinMate Communication INC on September 12, 2024 and sell it today you would earn a total of 300.00 from holding WinMate Communication INC or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WinMate Communication INC vs. Joinsoon Electronics MFG
Performance |
| Timeline |
| WinMate Communication INC |
| Joinsoon Electronics MFG |
WinMate Communication and Joinsoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WinMate Communication and Joinsoon Electronics
The main advantage of trading using opposite WinMate Communication and Joinsoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, Joinsoon Electronics 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 Joinsoon Electronics will offset losses from the drop in Joinsoon Electronics' long position.| WinMate Communication vs. ANJI Technology Co | WinMate Communication vs. Emerging Display Technologies | WinMate Communication vs. U Tech Media Corp | WinMate Communication vs. Ruentex Development Co |
| Joinsoon Electronics vs. Chung Hwa Chemical | Joinsoon Electronics vs. WinMate Communication INC | Joinsoon Electronics vs. Acelon Chemicals Fiber | Joinsoon Electronics vs. Chief Telecom |
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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