Correlation Between Wistron NeWeb and Jinan Acetate
Can any of the company-specific risk be diversified away by investing in both Wistron NeWeb and Jinan Acetate 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 NeWeb and Jinan Acetate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wistron NeWeb Corp and Jinan Acetate Chemical, you can compare the effects of market volatilities on Wistron NeWeb and Jinan Acetate 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 NeWeb with a short position of Jinan Acetate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron NeWeb and Jinan Acetate.
Diversification Opportunities for Wistron NeWeb and Jinan Acetate
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wistron and Jinan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wistron NeWeb Corp and Jinan Acetate Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinan Acetate Chemical and Wistron NeWeb 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 NeWeb Corp are associated (or correlated) with Jinan Acetate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinan Acetate Chemical has no effect on the direction of Wistron NeWeb i.e., Wistron NeWeb and Jinan Acetate go up and down completely randomly.
Pair Corralation between Wistron NeWeb and Jinan Acetate
Assuming the 90 days trading horizon Wistron NeWeb is expected to generate 4.51 times less return on investment than Jinan Acetate. But when comparing it to its historical volatility, Wistron NeWeb Corp is 1.61 times less risky than Jinan Acetate. It trades about 0.04 of its potential returns per unit of risk. Jinan Acetate Chemical is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 18,085 in Jinan Acetate Chemical on August 30, 2024 and sell it today you would earn a total of 68,315 from holding Jinan Acetate Chemical or generate 377.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron NeWeb Corp vs. Jinan Acetate Chemical
Performance |
| Timeline |
| Wistron NeWeb Corp |
| Jinan Acetate Chemical |
Wistron NeWeb and Jinan Acetate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron NeWeb and Jinan Acetate
The main advantage of trading using opposite Wistron NeWeb and Jinan Acetate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron NeWeb position performs unexpectedly, Jinan Acetate 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 Jinan Acetate will offset losses from the drop in Jinan Acetate's long position.| Wistron NeWeb vs. Maxigen Biotech | Wistron NeWeb vs. Wistron Information Technology | Wistron NeWeb vs. Ichia Technologies | Wistron NeWeb vs. Univacco Technology |
| Jinan Acetate vs. San Fu Chemical | Jinan Acetate vs. Tex Year Industries | Jinan Acetate vs. Concraft Holding Co | Jinan Acetate vs. Coremax 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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