Correlation Between Senao Networks and Wonderful
Can any of the company-specific risk be diversified away by investing in both Senao Networks and Wonderful 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 Senao Networks and Wonderful into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senao Networks and Wonderful Hi Tech Co, you can compare the effects of market volatilities on Senao Networks and Wonderful 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 Senao Networks with a short position of Wonderful. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senao Networks and Wonderful.
Diversification Opportunities for Senao Networks and Wonderful
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senao and Wonderful is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Senao Networks and Wonderful Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonderful Hi Tech and Senao Networks 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 Senao Networks are associated (or correlated) with Wonderful. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonderful Hi Tech has no effect on the direction of Senao Networks i.e., Senao Networks and Wonderful go up and down completely randomly.
Pair Corralation between Senao Networks and Wonderful
Assuming the 90 days trading horizon Senao Networks is expected to generate 1.48 times more return on investment than Wonderful. However, Senao Networks is 1.48 times more volatile than Wonderful Hi Tech Co. It trades about 0.44 of its potential returns per unit of risk. Wonderful Hi Tech Co is currently generating about -0.04 per unit of risk. If you would invest 14,250 in Senao Networks on September 3, 2024 and sell it today you would earn a total of 6,400 from holding Senao Networks or generate 44.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senao Networks vs. Wonderful Hi Tech Co
Performance |
| Timeline |
| Senao Networks |
| Wonderful Hi Tech |
Senao Networks and Wonderful Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senao Networks and Wonderful
The main advantage of trading using opposite Senao Networks and Wonderful positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senao Networks position performs unexpectedly, Wonderful 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 Wonderful will offset losses from the drop in Wonderful's long position.| Senao Networks vs. Accton Technology Corp | Senao Networks vs. Wistron NeWeb Corp | Senao Networks vs. Alpha Networks | Senao Networks vs. Gemtek Technology Co |
| Wonderful vs. Accton Technology Corp | Wonderful vs. Wistron NeWeb Corp | Wonderful vs. Alpha Networks | Wonderful vs. Gemtek Technology 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 CEOs Directory module to screen CEOs from public companies around the world.
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