Correlation Between WinWay Technology and Weblink International
Can any of the company-specific risk be diversified away by investing in both WinWay Technology and Weblink International 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 WinWay Technology and Weblink International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WinWay Technology Co and Weblink International, you can compare the effects of market volatilities on WinWay Technology and Weblink International 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 WinWay Technology with a short position of Weblink International. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinWay Technology and Weblink International.
Diversification Opportunities for WinWay Technology and Weblink International
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WinWay and Weblink is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding WinWay Technology Co and Weblink International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weblink International and WinWay 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 WinWay Technology Co are associated (or correlated) with Weblink International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weblink International has no effect on the direction of WinWay Technology i.e., WinWay Technology and Weblink International go up and down completely randomly.
Pair Corralation between WinWay Technology and Weblink International
Assuming the 90 days trading horizon WinWay Technology Co is expected to generate 2.45 times more return on investment than Weblink International. However, WinWay Technology is 2.45 times more volatile than Weblink International. It trades about 0.06 of its potential returns per unit of risk. Weblink International is currently generating about 0.04 per unit of risk. If you would invest 83,353 in WinWay Technology Co on November 3, 2024 and sell it today you would earn a total of 39,147 from holding WinWay Technology Co or generate 46.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WinWay Technology Co vs. Weblink International
Performance |
| Timeline |
| WinWay Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Weblink International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
WinWay Technology and Weblink International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WinWay Technology and Weblink International
The main advantage of trading using opposite WinWay Technology and Weblink International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinWay Technology position performs unexpectedly, Weblink International 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 Weblink International will offset losses from the drop in Weblink International's long position.The idea behind WinWay Technology Co and Weblink International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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