Correlation Between Parade Technologies and Welldone
Can any of the company-specific risk be diversified away by investing in both Parade Technologies and Welldone 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 Welldone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parade Technologies and Welldone Co, you can compare the effects of market volatilities on Parade Technologies and Welldone 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 Welldone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parade Technologies and Welldone.
Diversification Opportunities for Parade Technologies and Welldone
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Parade and Welldone is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Parade Technologies and Welldone Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welldone 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 Welldone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welldone has no effect on the direction of Parade Technologies i.e., Parade Technologies and Welldone go up and down completely randomly.
Pair Corralation between Parade Technologies and Welldone
Assuming the 90 days trading horizon Parade Technologies is expected to under-perform the Welldone. But the stock apears to be less risky and, when comparing its historical volatility, Parade Technologies is 1.31 times less risky than Welldone. The stock trades about -0.16 of its potential returns per unit of risk. The Welldone Co is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 4,755 in Welldone Co on December 4, 2024 and sell it today you would earn a total of 885.00 from holding Welldone Co or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parade Technologies vs. Welldone Co
Performance |
| Timeline |
| Parade Technologies |
| Welldone |
Parade Technologies and Welldone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parade Technologies and Welldone
The main advantage of trading using opposite Parade Technologies and Welldone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parade Technologies position performs unexpectedly, Welldone 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 Welldone will offset losses from the drop in Welldone's long position.| Parade Technologies vs. Aspeed Technology | Parade Technologies vs. Silergy Corp | Parade Technologies vs. Novatek Microelectronics Corp | Parade Technologies vs. WIN Semiconductors |
| Welldone vs. Chunghwa Telecom Co | Welldone vs. Taiwan Mobile Co | Welldone vs. Far EasTone Telecommunications | Welldone vs. Chief Telecom |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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