Correlation Between WinMate Communication and Wistron NeWeb
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and Wistron NeWeb 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 Wistron NeWeb 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 Wistron NeWeb Corp, you can compare the effects of market volatilities on WinMate Communication and Wistron NeWeb 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 Wistron NeWeb. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Wistron NeWeb.
Diversification Opportunities for WinMate Communication and Wistron NeWeb
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WinMate and Wistron is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Wistron NeWeb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wistron NeWeb Corp 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 Wistron NeWeb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wistron NeWeb Corp has no effect on the direction of WinMate Communication i.e., WinMate Communication and Wistron NeWeb go up and down completely randomly.
Pair Corralation between WinMate Communication and Wistron NeWeb
Assuming the 90 days trading horizon WinMate Communication is expected to generate 1.02 times less return on investment than Wistron NeWeb. But when comparing it to its historical volatility, WinMate Communication INC is 1.23 times less risky than Wistron NeWeb. It trades about 0.12 of its potential returns per unit of risk. Wistron NeWeb Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 13,500 in Wistron NeWeb Corp on October 31, 2024 and sell it today you would earn a total of 700.00 from holding Wistron NeWeb Corp or generate 5.19% 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. Wistron NeWeb Corp
Performance |
Timeline |
WinMate Communication INC |
Wistron NeWeb Corp |
WinMate Communication and Wistron NeWeb Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WinMate Communication and Wistron NeWeb
The main advantage of trading using opposite WinMate Communication and Wistron NeWeb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, Wistron NeWeb 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 Wistron NeWeb will offset losses from the drop in Wistron NeWeb'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 |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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