Correlation Between WinMate Communication and Cheng Fwa
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and Cheng Fwa 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 Cheng Fwa 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 Cheng Fwa Industrial, you can compare the effects of market volatilities on WinMate Communication and Cheng Fwa 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 Cheng Fwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Cheng Fwa.
Diversification Opportunities for WinMate Communication and Cheng Fwa
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WinMate and Cheng is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Cheng Fwa Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheng Fwa Industrial 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 Cheng Fwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheng Fwa Industrial has no effect on the direction of WinMate Communication i.e., WinMate Communication and Cheng Fwa go up and down completely randomly.
Pair Corralation between WinMate Communication and Cheng Fwa
Assuming the 90 days trading horizon WinMate Communication INC is expected to generate 0.37 times more return on investment than Cheng Fwa. However, WinMate Communication INC is 2.73 times less risky than Cheng Fwa. It trades about 0.34 of its potential returns per unit of risk. Cheng Fwa Industrial is currently generating about -0.01 per unit of risk. If you would invest 13,800 in WinMate Communication INC on September 5, 2024 and sell it today you would earn a total of 1,600 from holding WinMate Communication INC or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WinMate Communication INC vs. Cheng Fwa Industrial
Performance |
| Timeline |
| WinMate Communication INC |
| Cheng Fwa Industrial |
WinMate Communication and Cheng Fwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WinMate Communication and Cheng Fwa
The main advantage of trading using opposite WinMate Communication and Cheng Fwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, Cheng Fwa 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 Cheng Fwa will offset losses from the drop in Cheng Fwa'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 |
| Cheng Fwa vs. WinMate Communication INC | Cheng Fwa vs. SynCore Biotechnology Co | Cheng Fwa vs. Loop Telecommunication International | Cheng Fwa vs. Sunmax Biotechnology Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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