Correlation Between Wistron Information and Chinese Gamer
Can any of the company-specific risk be diversified away by investing in both Wistron Information and Chinese Gamer 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 Wistron Information and Chinese Gamer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wistron Information Technology and Chinese Gamer International, you can compare the effects of market volatilities on Wistron Information and Chinese Gamer 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 Wistron Information with a short position of Chinese Gamer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron Information and Chinese Gamer.
Diversification Opportunities for Wistron Information and Chinese Gamer
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wistron and Chinese is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Wistron Information Technology and Chinese Gamer International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Gamer Intern and Wistron Information 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 Wistron Information Technology are associated (or correlated) with Chinese Gamer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Gamer Intern has no effect on the direction of Wistron Information i.e., Wistron Information and Chinese Gamer go up and down completely randomly.
Pair Corralation between Wistron Information and Chinese Gamer
Assuming the 90 days trading horizon Wistron Information Technology is expected to under-perform the Chinese Gamer. But the stock apears to be less risky and, when comparing its historical volatility, Wistron Information Technology is 1.2 times less risky than Chinese Gamer. The stock trades about -0.03 of its potential returns per unit of risk. The Chinese Gamer International is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,110 in Chinese Gamer International on September 2, 2024 and sell it today you would lose (590.00) from holding Chinese Gamer International or give up 11.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron Information Technology vs. Chinese Gamer International
Performance |
| Timeline |
| Wistron Information |
| Chinese Gamer Intern |
Wistron Information and Chinese Gamer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron Information and Chinese Gamer
The main advantage of trading using opposite Wistron Information and Chinese Gamer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron Information position performs unexpectedly, Chinese Gamer 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 Chinese Gamer will offset losses from the drop in Chinese Gamer's long position.| Wistron Information vs. Acer E Enabling Service | Wistron Information vs. Green World Fintech | Wistron Information vs. Syscom Computer Engineering |
| Chinese Gamer vs. Genovate Biotechnology Co | Chinese Gamer vs. Universal Vision Biotechnology | Chinese Gamer vs. RiTdisplay Corp | Chinese Gamer vs. Elitegroup Computer Systems |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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