Correlation Between TOPMATERIAL and Wireless Power
Can any of the company-specific risk be diversified away by investing in both TOPMATERIAL and Wireless Power 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 TOPMATERIAL and Wireless Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPMATERIAL LTD and Wireless Power Amplifier, you can compare the effects of market volatilities on TOPMATERIAL and Wireless Power 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 TOPMATERIAL with a short position of Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPMATERIAL and Wireless Power.
Diversification Opportunities for TOPMATERIAL and Wireless Power
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TOPMATERIAL and Wireless is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding TOPMATERIAL LTD and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier and TOPMATERIAL 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 TOPMATERIAL LTD are associated (or correlated) with Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of TOPMATERIAL i.e., TOPMATERIAL and Wireless Power go up and down completely randomly.
Pair Corralation between TOPMATERIAL and Wireless Power
Assuming the 90 days trading horizon TOPMATERIAL LTD is expected to under-perform the Wireless Power. But the stock apears to be less risky and, when comparing its historical volatility, TOPMATERIAL LTD is 3.07 times less risky than Wireless Power. The stock trades about -0.3 of its potential returns per unit of risk. The Wireless Power Amplifier is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 285,000 in Wireless Power Amplifier on November 8, 2024 and sell it today you would earn a total of 240,000 from holding Wireless Power Amplifier or generate 84.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOPMATERIAL LTD vs. Wireless Power Amplifier
Performance |
| Timeline |
| TOPMATERIAL LTD |
| Wireless Power Amplifier |
TOPMATERIAL and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOPMATERIAL and Wireless Power
The main advantage of trading using opposite TOPMATERIAL and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPMATERIAL position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.| TOPMATERIAL vs. Hanjoo Light Metal | TOPMATERIAL vs. Shinhan Financial Group | TOPMATERIAL vs. Shinhan Inverse Copper | TOPMATERIAL vs. Daejung Chemicals Metals |
| Wireless Power vs. Pureun Mutual Savings | Wireless Power vs. KB Financial Group | Wireless Power vs. Settlebank | Wireless Power vs. Green Cross Medical |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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