Correlation Between WPG Holdings and Niching Industrial
Can any of the company-specific risk be diversified away by investing in both WPG Holdings and Niching Industrial 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 Niching Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WPG Holdings and Niching Industrial, you can compare the effects of market volatilities on WPG Holdings and Niching Industrial 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 Niching Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPG Holdings and Niching Industrial.
Diversification Opportunities for WPG Holdings and Niching Industrial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WPG and Niching is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding WPG Holdings and Niching Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niching Industrial 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 Niching Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niching Industrial has no effect on the direction of WPG Holdings i.e., WPG Holdings and Niching Industrial go up and down completely randomly.
Pair Corralation between WPG Holdings and Niching Industrial
Assuming the 90 days trading horizon WPG Holdings is expected to generate 1.23 times less return on investment than Niching Industrial. But when comparing it to its historical volatility, WPG Holdings is 10.92 times less risky than Niching Industrial. It trades about 0.21 of its potential returns per unit of risk. Niching Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,040 in Niching Industrial on September 13, 2024 and sell it today you would earn a total of 50.00 from holding Niching Industrial or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WPG Holdings vs. Niching Industrial
Performance |
| Timeline |
| WPG Holdings |
| Niching Industrial |
WPG Holdings and Niching Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WPG Holdings and Niching Industrial
The main advantage of trading using opposite WPG Holdings and Niching Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPG Holdings position performs unexpectedly, Niching Industrial 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 Niching Industrial will offset losses from the drop in Niching Industrial's long position.| WPG Holdings vs. Trade Van Information Services | WPG Holdings vs. Wei Chuan Foods | WPG Holdings vs. Otsuka Information Technology | WPG Holdings vs. Information Technology Total |
| Niching Industrial vs. Dimension Computer Technology | Niching Industrial vs. Kworld Computer Co | Niching Industrial vs. Ruentex Development Co | Niching Industrial vs. Symtek Automation Asia |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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