Correlation Between Ennoconn Corp and Wah Hong
Can any of the company-specific risk be diversified away by investing in both Ennoconn Corp and Wah Hong 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 Ennoconn Corp and Wah Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ennoconn Corp and Wah Hong Industrial, you can compare the effects of market volatilities on Ennoconn Corp and Wah Hong 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 Ennoconn Corp with a short position of Wah Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ennoconn Corp and Wah Hong.
Diversification Opportunities for Ennoconn Corp and Wah Hong
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ennoconn and Wah is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ennoconn Corp and Wah Hong Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Hong Industrial and Ennoconn Corp 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 Ennoconn Corp are associated (or correlated) with Wah Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Hong Industrial has no effect on the direction of Ennoconn Corp i.e., Ennoconn Corp and Wah Hong go up and down completely randomly.
Pair Corralation between Ennoconn Corp and Wah Hong
Assuming the 90 days trading horizon Ennoconn Corp is expected to generate 2.03 times less return on investment than Wah Hong. But when comparing it to its historical volatility, Ennoconn Corp is 1.17 times less risky than Wah Hong. It trades about 0.03 of its potential returns per unit of risk. Wah Hong Industrial is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,747 in Wah Hong Industrial on December 25, 2024 and sell it today you would earn a total of 1,403 from holding Wah Hong Industrial or generate 51.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ennoconn Corp vs. Wah Hong Industrial
Performance |
| Timeline |
| Ennoconn Corp |
| Wah Hong Industrial |
Ennoconn Corp and Wah Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ennoconn Corp and Wah Hong
The main advantage of trading using opposite Ennoconn Corp and Wah Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ennoconn Corp position performs unexpectedly, Wah Hong 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 Wah Hong will offset losses from the drop in Wah Hong's long position.| Ennoconn Corp vs. Advantech Co | Ennoconn Corp vs. Zhen Ding Technology | Ennoconn Corp vs. General Interface Solution | Ennoconn Corp vs. Hiwin Technologies Corp |
| Wah Hong vs. Tatung System Technologies | Wah Hong vs. Taiwan Chinsan Electronic | Wah Hong vs. Alcor Micro | Wah Hong vs. AVY Precision Technology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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