Correlation Between Wonderful and Dimension Computer
Can any of the company-specific risk be diversified away by investing in both Wonderful and Dimension Computer 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 Wonderful and Dimension Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonderful Hi Tech Co and Dimension Computer Technology, you can compare the effects of market volatilities on Wonderful and Dimension Computer 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 Wonderful with a short position of Dimension Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonderful and Dimension Computer.
Diversification Opportunities for Wonderful and Dimension Computer
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wonderful and Dimension is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Wonderful Hi Tech Co and Dimension Computer Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimension Computer and Wonderful 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 Wonderful Hi Tech Co are associated (or correlated) with Dimension Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimension Computer has no effect on the direction of Wonderful i.e., Wonderful and Dimension Computer go up and down completely randomly.
Pair Corralation between Wonderful and Dimension Computer
Assuming the 90 days trading horizon Wonderful Hi Tech Co is expected to under-perform the Dimension Computer. But the stock apears to be less risky and, when comparing its historical volatility, Wonderful Hi Tech Co is 2.88 times less risky than Dimension Computer. The stock trades about -0.03 of its potential returns per unit of risk. The Dimension Computer Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,460 in Dimension Computer Technology on September 13, 2024 and sell it today you would earn a total of 370.00 from holding Dimension Computer Technology or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonderful Hi Tech Co vs. Dimension Computer Technology
Performance |
| Timeline |
| Wonderful Hi Tech |
| Dimension Computer |
Wonderful and Dimension Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonderful and Dimension Computer
The main advantage of trading using opposite Wonderful and Dimension Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonderful position performs unexpectedly, Dimension Computer 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 Dimension Computer will offset losses from the drop in Dimension Computer's long position.| Wonderful vs. Gemtek Technology Co | Wonderful vs. Ruentex Development Co | Wonderful vs. WiseChip Semiconductor | Wonderful vs. Novatek Microelectronics Corp |
| Dimension Computer vs. RiTdisplay Corp | Dimension Computer vs. Eastern Media International | Dimension Computer vs. Newretail Co | Dimension Computer vs. Ching Feng Home |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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