Correlation Between Excelsior Medical and WT Microelectronics
Can any of the company-specific risk be diversified away by investing in both Excelsior Medical and WT Microelectronics 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 Excelsior Medical and WT Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelsior Medical Co and WT Microelectronics Co, you can compare the effects of market volatilities on Excelsior Medical and WT Microelectronics 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 Excelsior Medical with a short position of WT Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Medical and WT Microelectronics.
Diversification Opportunities for Excelsior Medical and WT Microelectronics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Excelsior and 3036A is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Medical Co and WT Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Microelectronics and Excelsior Medical 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 Excelsior Medical Co are associated (or correlated) with WT Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Microelectronics has no effect on the direction of Excelsior Medical i.e., Excelsior Medical and WT Microelectronics go up and down completely randomly.
Pair Corralation between Excelsior Medical and WT Microelectronics
Assuming the 90 days trading horizon Excelsior Medical Co is expected to generate 3.56 times more return on investment than WT Microelectronics. However, Excelsior Medical is 3.56 times more volatile than WT Microelectronics Co. It trades about 0.12 of its potential returns per unit of risk. WT Microelectronics Co is currently generating about 0.21 per unit of risk. If you would invest 8,630 in Excelsior Medical Co on September 15, 2024 and sell it today you would earn a total of 70.00 from holding Excelsior Medical Co or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excelsior Medical Co vs. WT Microelectronics Co
Performance |
| Timeline |
| Excelsior Medical |
| WT Microelectronics |
Excelsior Medical and WT Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelsior Medical and WT Microelectronics
The main advantage of trading using opposite Excelsior Medical and WT Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Medical position performs unexpectedly, WT Microelectronics 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 WT Microelectronics will offset losses from the drop in WT Microelectronics' long position.| Excelsior Medical vs. Apex Biotechnology Corp | Excelsior Medical vs. Ruentex Development Co | Excelsior Medical vs. WiseChip Semiconductor | Excelsior Medical vs. Novatek Microelectronics Corp |
| WT Microelectronics vs. Dynamic Medical Technologies | WT Microelectronics vs. China Steel Corp | WT Microelectronics vs. Excelsior Medical Co | WT Microelectronics vs. Yieh United Steel |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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