Correlation Between WinMate Communication and AVer Information
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and AVer Information 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 AVer Information 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 AVer Information, you can compare the effects of market volatilities on WinMate Communication and AVer Information 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 AVer Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and AVer Information.
Diversification Opportunities for WinMate Communication and AVer Information
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WinMate and AVer is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and AVer Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVer Information 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 AVer Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVer Information has no effect on the direction of WinMate Communication i.e., WinMate Communication and AVer Information go up and down completely randomly.
Pair Corralation between WinMate Communication and AVer Information
Assuming the 90 days trading horizon WinMate Communication INC is expected to generate 1.01 times more return on investment than AVer Information. However, WinMate Communication is 1.01 times more volatile than AVer Information. It trades about 0.36 of its potential returns per unit of risk. AVer Information is currently generating about -0.23 per unit of risk. If you would invest 13,800 in WinMate Communication INC on September 3, 2024 and sell it today you would earn a total of 1,350 from holding WinMate Communication INC or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WinMate Communication INC vs. AVer Information
Performance |
| Timeline |
| WinMate Communication INC |
| AVer Information |
WinMate Communication and AVer Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WinMate Communication and AVer Information
The main advantage of trading using opposite WinMate Communication and AVer Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, AVer Information 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 AVer Information will offset losses from the drop in AVer Information's long position.| WinMate Communication vs. Hon Hai Precision | WinMate Communication vs. Delta Electronics | WinMate Communication vs. LARGAN Precision Co | WinMate Communication vs. AU Optronics |
| AVer Information vs. Taiwan Semiconductor Manufacturing | AVer Information vs. Yang Ming Marine | AVer Information vs. ASE Industrial Holding | AVer Information vs. AU Optronics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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