Correlation Between WinMate Communication and Top Union
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and Top Union 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 Top Union 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 Top Union Electronics, you can compare the effects of market volatilities on WinMate Communication and Top Union 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 Top Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Top Union.
Diversification Opportunities for WinMate Communication and Top Union
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WinMate and Top is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Top Union Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Union Electronics 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 Top Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Union Electronics has no effect on the direction of WinMate Communication i.e., WinMate Communication and Top Union go up and down completely randomly.
Pair Corralation between WinMate Communication and Top Union
Assuming the 90 days trading horizon WinMate Communication INC is expected to generate 1.51 times more return on investment than Top Union. However, WinMate Communication is 1.51 times more volatile than Top Union Electronics. It trades about 0.05 of its potential returns per unit of risk. Top Union Electronics is currently generating about 0.01 per unit of risk. If you would invest 12,500 in WinMate Communication INC on August 29, 2024 and sell it today you would earn a total of 2,750 from holding WinMate Communication INC or generate 22.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WinMate Communication INC vs. Top Union Electronics
Performance |
| Timeline |
| WinMate Communication INC |
| Top Union Electronics |
WinMate Communication and Top Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WinMate Communication and Top Union
The main advantage of trading using opposite WinMate Communication and Top Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, Top Union 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 Top Union will offset losses from the drop in Top Union's long position.| WinMate Communication vs. Advantech Co | WinMate Communication vs. IEI Integration Corp | WinMate Communication vs. Flytech Technology Co | WinMate Communication vs. ADLINK Technology |
| Top Union vs. Para Light Electronics | Top Union vs. ANJI Technology Co | Top Union vs. Aiptek International | Top Union vs. General Interface Solution |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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