Correlation Between Chaheng Precision and Wistron Information
Can any of the company-specific risk be diversified away by investing in both Chaheng Precision and Wistron Information 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 Chaheng Precision and Wistron Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chaheng Precision Co and Wistron Information Technology, you can compare the effects of market volatilities on Chaheng Precision and Wistron Information 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 Chaheng Precision with a short position of Wistron Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaheng Precision and Wistron Information.
Diversification Opportunities for Chaheng Precision and Wistron Information
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chaheng and Wistron is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chaheng Precision Co and Wistron Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wistron Information and Chaheng Precision 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 Chaheng Precision Co are associated (or correlated) with Wistron Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wistron Information has no effect on the direction of Chaheng Precision i.e., Chaheng Precision and Wistron Information go up and down completely randomly.
Pair Corralation between Chaheng Precision and Wistron Information
Assuming the 90 days trading horizon Chaheng Precision Co is expected to generate 0.78 times more return on investment than Wistron Information. However, Chaheng Precision Co is 1.29 times less risky than Wistron Information. It trades about 0.29 of its potential returns per unit of risk. Wistron Information Technology is currently generating about -0.13 per unit of risk. If you would invest 8,690 in Chaheng Precision Co on August 28, 2024 and sell it today you would earn a total of 610.00 from holding Chaheng Precision Co or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chaheng Precision Co vs. Wistron Information Technology
Performance |
| Timeline |
| Chaheng Precision |
| Wistron Information |
Chaheng Precision and Wistron Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chaheng Precision and Wistron Information
The main advantage of trading using opposite Chaheng Precision and Wistron Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaheng Precision position performs unexpectedly, Wistron Information 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 Wistron Information will offset losses from the drop in Wistron Information's long position.| Chaheng Precision vs. China Airlines | Chaheng Precision vs. Formosa Plastics Corp | Chaheng Precision vs. Ruentex Development Co | Chaheng Precision vs. Symtek Automation Asia |
| Wistron Information vs. Acer E Enabling Service | Wistron Information vs. Sysage Technology Co | Wistron Information vs. Syscom Computer Engineering | Wistron Information vs. Jetwell Computer 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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