Correlation Between WinMate Communication and Taiwan Steel
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and Taiwan Steel 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 Taiwan Steel 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 Taiwan Steel Union, you can compare the effects of market volatilities on WinMate Communication and Taiwan Steel 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 Taiwan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Taiwan Steel.
Diversification Opportunities for WinMate Communication and Taiwan Steel
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WinMate and Taiwan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Taiwan Steel Union in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Steel Union 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 Taiwan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Steel Union has no effect on the direction of WinMate Communication i.e., WinMate Communication and Taiwan Steel go up and down completely randomly.
Pair Corralation between WinMate Communication and Taiwan Steel
Assuming the 90 days trading horizon WinMate Communication INC is expected to generate 2.23 times more return on investment than Taiwan Steel. However, WinMate Communication is 2.23 times more volatile than Taiwan Steel Union. It trades about 0.24 of its potential returns per unit of risk. Taiwan Steel Union is currently generating about 0.47 per unit of risk. If you would invest 15,900 in WinMate Communication INC on November 28, 2024 and sell it today you would earn a total of 1,650 from holding WinMate Communication INC or generate 10.38% 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. Taiwan Steel Union
Performance |
| Timeline |
| WinMate Communication INC |
| Taiwan Steel Union |
WinMate Communication and Taiwan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WinMate Communication and Taiwan Steel
The main advantage of trading using opposite WinMate Communication and Taiwan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, Taiwan Steel 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 Taiwan Steel will offset losses from the drop in Taiwan Steel'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 |
| Taiwan Steel vs. Cleanaway Co | Taiwan Steel vs. Sunny Friend Environmental | Taiwan Steel vs. Topco Scientific Co | Taiwan Steel vs. Kung Long Batteries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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