Correlation Between WPG Holdings and GrandTech
Can any of the company-specific risk be diversified away by investing in both WPG Holdings and GrandTech 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 GrandTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WPG Holdings and GrandTech CG Systems, you can compare the effects of market volatilities on WPG Holdings and GrandTech 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 GrandTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPG Holdings and GrandTech.
Diversification Opportunities for WPG Holdings and GrandTech
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WPG and GrandTech is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding WPG Holdings and GrandTech CG Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrandTech CG Systems 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 GrandTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrandTech CG Systems has no effect on the direction of WPG Holdings i.e., WPG Holdings and GrandTech go up and down completely randomly.
Pair Corralation between WPG Holdings and GrandTech
Assuming the 90 days trading horizon WPG Holdings is expected to generate 0.22 times more return on investment than GrandTech. However, WPG Holdings is 4.59 times less risky than GrandTech. It trades about 0.22 of its potential returns per unit of risk. GrandTech CG Systems is currently generating about -0.18 per unit of risk. If you would invest 5,050 in WPG Holdings on August 30, 2024 and sell it today you would earn a total of 90.00 from holding WPG Holdings or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WPG Holdings vs. GrandTech CG Systems
Performance |
| Timeline |
| WPG Holdings |
| GrandTech CG Systems |
WPG Holdings and GrandTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WPG Holdings and GrandTech
The main advantage of trading using opposite WPG Holdings and GrandTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPG Holdings position performs unexpectedly, GrandTech 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 GrandTech will offset losses from the drop in GrandTech's long position.| WPG Holdings vs. Pacific Hospital Supply | WPG Holdings vs. Professional Computer Technology | WPG Holdings vs. Far EasTone Telecommunications | WPG Holdings vs. Lian Hwa Foods |
| GrandTech vs. Jia Jie Biomedical | GrandTech vs. BRIM Biotechnology | GrandTech vs. Onyx Healthcare | GrandTech vs. Genovate Biotechnology 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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