Correlation Between Wistron Information and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both Wistron Information and Asia Electronic 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 Asia Electronic 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 Asia Electronic Material, you can compare the effects of market volatilities on Wistron Information and Asia Electronic 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 Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron Information and Asia Electronic.
Diversification Opportunities for Wistron Information and Asia Electronic
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wistron and Asia is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Wistron Information Technology and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material 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 Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of Wistron Information i.e., Wistron Information and Asia Electronic go up and down completely randomly.
Pair Corralation between Wistron Information and Asia Electronic
Assuming the 90 days trading horizon Wistron Information Technology is expected to under-perform the Asia Electronic. In addition to that, Wistron Information is 1.46 times more volatile than Asia Electronic Material. It trades about -0.17 of its total potential returns per unit of risk. Asia Electronic Material is currently generating about 0.04 per unit of volatility. If you would invest 2,075 in Asia Electronic Material on September 5, 2024 and sell it today you would earn a total of 15.00 from holding Asia Electronic Material or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron Information Technology vs. Asia Electronic Material
Performance |
| Timeline |
| Wistron Information |
| Asia Electronic Material |
Wistron Information and Asia Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron Information and Asia Electronic
The main advantage of trading using opposite Wistron Information and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron Information position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic's long position.| Wistron Information vs. Digital China Holdings | Wistron Information vs. Acer E Enabling Service | Wistron Information vs. Sysage Technology Co | Wistron Information vs. Green World Fintech |
| Asia Electronic vs. International Games System | Asia Electronic vs. China Metal Products | Asia Electronic vs. Dynamic Medical Technologies | Asia Electronic vs. Chernan Metal Industrial |
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 CEOs Directory module to screen CEOs from public companies around the world.
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