Correlation Between Wiwynn Corp and Feng Ching
Can any of the company-specific risk be diversified away by investing in both Wiwynn Corp and Feng Ching 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 Wiwynn Corp and Feng Ching into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wiwynn Corp and Feng Ching Metal, you can compare the effects of market volatilities on Wiwynn Corp and Feng Ching 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 Wiwynn Corp with a short position of Feng Ching. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wiwynn Corp and Feng Ching.
Diversification Opportunities for Wiwynn Corp and Feng Ching
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wiwynn and Feng is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wiwynn Corp and Feng Ching Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feng Ching Metal and Wiwynn 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 Wiwynn Corp are associated (or correlated) with Feng Ching. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feng Ching Metal has no effect on the direction of Wiwynn Corp i.e., Wiwynn Corp and Feng Ching go up and down completely randomly.
Pair Corralation between Wiwynn Corp and Feng Ching
Assuming the 90 days trading horizon Wiwynn Corp is expected to under-perform the Feng Ching. In addition to that, Wiwynn Corp is 1.46 times more volatile than Feng Ching Metal. It trades about -0.25 of its total potential returns per unit of risk. Feng Ching Metal is currently generating about 0.05 per unit of volatility. If you would invest 1,780 in Feng Ching Metal on November 3, 2024 and sell it today you would earn a total of 25.00 from holding Feng Ching Metal or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wiwynn Corp vs. Feng Ching Metal
Performance |
| Timeline |
| Wiwynn Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Feng Ching Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wiwynn Corp and Feng Ching Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wiwynn Corp and Feng Ching
The main advantage of trading using opposite Wiwynn Corp and Feng Ching positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wiwynn Corp position performs unexpectedly, Feng Ching 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 Feng Ching will offset losses from the drop in Feng Ching's long position.The idea behind Wiwynn Corp and Feng Ching Metal 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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