Correlation Between Parade Technologies and WinMate Communication
Can any of the company-specific risk be diversified away by investing in both Parade Technologies and WinMate Communication 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 Parade Technologies and WinMate Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parade Technologies and WinMate Communication INC, you can compare the effects of market volatilities on Parade Technologies and WinMate Communication 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 Parade Technologies with a short position of WinMate Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parade Technologies and WinMate Communication.
Diversification Opportunities for Parade Technologies and WinMate Communication
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Parade and WinMate is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Parade Technologies and WinMate Communication INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WinMate Communication INC and Parade Technologies 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 Parade Technologies are associated (or correlated) with WinMate Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WinMate Communication INC has no effect on the direction of Parade Technologies i.e., Parade Technologies and WinMate Communication go up and down completely randomly.
Pair Corralation between Parade Technologies and WinMate Communication
Assuming the 90 days trading horizon Parade Technologies is expected to under-perform the WinMate Communication. In addition to that, Parade Technologies is 1.91 times more volatile than WinMate Communication INC. It trades about -0.05 of its total potential returns per unit of risk. WinMate Communication INC is currently generating about 0.35 per unit of volatility. If you would invest 13,800 in WinMate Communication INC on September 1, 2024 and sell it today you would earn a total of 1,350 from holding WinMate Communication INC or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parade Technologies vs. WinMate Communication INC
Performance |
| Timeline |
| Parade Technologies |
| WinMate Communication INC |
Parade Technologies and WinMate Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parade Technologies and WinMate Communication
The main advantage of trading using opposite Parade Technologies and WinMate Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parade Technologies position performs unexpectedly, WinMate Communication 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 WinMate Communication will offset losses from the drop in WinMate Communication's long position.| Parade Technologies vs. Aspeed Technology | Parade Technologies vs. Silergy Corp | Parade Technologies vs. Novatek Microelectronics Corp | Parade Technologies vs. WIN Semiconductors |
| WinMate Communication vs. Hon Hai Precision | WinMate Communication vs. Delta Electronics | WinMate Communication vs. LARGAN Precision Co | WinMate Communication vs. Yageo Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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