Correlation Between WPG Holdings and Deltamac Taiwan
Can any of the company-specific risk be diversified away by investing in both WPG Holdings and Deltamac Taiwan 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 Deltamac Taiwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WPG Holdings and Deltamac Taiwan Co, you can compare the effects of market volatilities on WPG Holdings and Deltamac Taiwan 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 Deltamac Taiwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPG Holdings and Deltamac Taiwan.
Diversification Opportunities for WPG Holdings and Deltamac Taiwan
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WPG and Deltamac is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding WPG Holdings and Deltamac Taiwan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltamac Taiwan 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 Deltamac Taiwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltamac Taiwan has no effect on the direction of WPG Holdings i.e., WPG Holdings and Deltamac Taiwan go up and down completely randomly.
Pair Corralation between WPG Holdings and Deltamac Taiwan
Assuming the 90 days trading horizon WPG Holdings is expected to generate 0.02 times more return on investment than Deltamac Taiwan. However, WPG Holdings is 44.63 times less risky than Deltamac Taiwan. It trades about 0.21 of its potential returns per unit of risk. Deltamac Taiwan Co is currently generating about -0.02 per unit of risk. If you would invest 5,110 in WPG Holdings on September 13, 2024 and sell it today you would earn a total of 40.00 from holding WPG Holdings or generate 0.78% 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. Deltamac Taiwan Co
Performance |
| Timeline |
| WPG Holdings |
| Deltamac Taiwan |
WPG Holdings and Deltamac Taiwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WPG Holdings and Deltamac Taiwan
The main advantage of trading using opposite WPG Holdings and Deltamac Taiwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WPG Holdings position performs unexpectedly, Deltamac Taiwan 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 Deltamac Taiwan will offset losses from the drop in Deltamac Taiwan'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 |
| Deltamac Taiwan vs. Pili International Multimedia | Deltamac Taiwan vs. YuantaP shares Taiwan Mid Cap | Deltamac Taiwan vs. Fubon MSCI Taiwan | Deltamac Taiwan vs. YuantaP shares Taiwan Electronics |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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