Correlation Between Wistron Information and Genesis Technology
Can any of the company-specific risk be diversified away by investing in both Wistron Information and Genesis Technology 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 Genesis Technology 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 Genesis Technology, you can compare the effects of market volatilities on Wistron Information and Genesis Technology 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 Genesis Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron Information and Genesis Technology.
Diversification Opportunities for Wistron Information and Genesis Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wistron and Genesis is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Wistron Information Technology and Genesis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Technology 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 Genesis Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Technology has no effect on the direction of Wistron Information i.e., Wistron Information and Genesis Technology go up and down completely randomly.
Pair Corralation between Wistron Information and Genesis Technology
Assuming the 90 days trading horizon Wistron Information Technology is expected to generate 1.13 times more return on investment than Genesis Technology. However, Wistron Information is 1.13 times more volatile than Genesis Technology. It trades about 0.01 of its potential returns per unit of risk. Genesis Technology is currently generating about 0.01 per unit of risk. If you would invest 11,322 in Wistron Information Technology on August 27, 2024 and sell it today you would lose (122.00) from holding Wistron Information Technology or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron Information Technology vs. Genesis Technology
Performance |
| Timeline |
| Wistron Information |
| Genesis Technology |
Wistron Information and Genesis Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron Information and Genesis Technology
The main advantage of trading using opposite Wistron Information and Genesis Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron Information position performs unexpectedly, Genesis Technology 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 Genesis Technology will offset losses from the drop in Genesis Technology's long position.| 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 |
| Genesis Technology vs. Acer E Enabling Service | Genesis Technology vs. Sysage Technology Co | Genesis Technology vs. Syscom Computer Engineering | Genesis Technology 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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