Correlation Between WPG Holdings and Asia Vital
Can any of the company-specific risk be diversified away by investing in both WPG Holdings and Asia Vital 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 WPG Holdings and Asia Vital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WPG Holdings and Asia Vital Components, you can compare the effects of market volatilities on WPG Holdings and Asia Vital 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 WPG Holdings with a short position of Asia Vital. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPG Holdings and Asia Vital.
Diversification Opportunities for WPG Holdings and Asia Vital
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WPG and Asia is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding WPG Holdings and Asia Vital Components in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Vital Components and WPG Holdings 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 WPG Holdings are associated (or correlated) with Asia Vital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Vital Components has no effect on the direction of WPG Holdings i.e., WPG Holdings and Asia Vital go up and down completely randomly.
Pair Corralation between WPG Holdings and Asia Vital
Assuming the 90 days trading horizon WPG Holdings is expected to generate 0.55 times more return on investment than Asia Vital. However, WPG Holdings is 1.82 times less risky than Asia Vital. It trades about -0.05 of its potential returns per unit of risk. Asia Vital Components is currently generating about -0.04 per unit of risk. If you would invest 8,650 in WPG Holdings on November 28, 2024 and sell it today you would lose (1,590) from holding WPG Holdings or give up 18.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WPG Holdings vs. Asia Vital Components
Performance |
| Timeline |
| WPG Holdings |
| Asia Vital Components |
WPG Holdings and Asia Vital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WPG Holdings and Asia Vital
The main advantage of trading using opposite WPG Holdings and Asia Vital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPG Holdings position performs unexpectedly, Asia Vital 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 Asia Vital will offset losses from the drop in Asia Vital's long position.| WPG Holdings vs. Synnex Technology International | WPG Holdings vs. Powertech Technology | WPG Holdings vs. Wistron Corp | WPG Holdings vs. Chicony Electronics Co |
| Asia Vital vs. Unimicron Technology Corp | Asia Vital vs. Asia Optical Co | Asia Vital vs. Kinsus Interconnect Technology | Asia Vital vs. Novatek Microelectronics Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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