Correlation Between Genesis Technology and Wistron Information
Can any of the company-specific risk be diversified away by investing in both Genesis Technology and Wistron Information 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 Genesis Technology and Wistron Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genesis Technology and Wistron Information Technology, you can compare the effects of market volatilities on Genesis Technology and Wistron Information 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 Genesis Technology with a short position of Wistron Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Technology and Wistron Information.
Diversification Opportunities for Genesis Technology and Wistron Information
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genesis and Wistron is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Technology and Wistron Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wistron Information and Genesis Technology 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 Genesis Technology are associated (or correlated) with Wistron Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wistron Information has no effect on the direction of Genesis Technology i.e., Genesis Technology and Wistron Information go up and down completely randomly.
Pair Corralation between Genesis Technology and Wistron Information
Assuming the 90 days trading horizon Genesis Technology is expected to generate 1.35 times less return on investment than Wistron Information. But when comparing it to its historical volatility, Genesis Technology is 1.25 times less risky than Wistron Information. It trades about 0.04 of its potential returns per unit of risk. Wistron Information Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,348 in Wistron Information Technology on August 27, 2024 and sell it today you would earn a total of 2,852 from holding Wistron Information Technology or generate 34.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genesis Technology vs. Wistron Information Technology
Performance |
| Timeline |
| Genesis Technology |
| Wistron Information |
Genesis Technology and Wistron Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genesis Technology and Wistron Information
The main advantage of trading using opposite Genesis Technology and Wistron Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesis Technology position performs unexpectedly, Wistron Information 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 Wistron Information will offset losses from the drop in Wistron Information's long position.| 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 |
| 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 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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