Correlation Between Wiwynn Corp and Elan Microelectronics
Can any of the company-specific risk be diversified away by investing in both Wiwynn Corp and Elan Microelectronics 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 Elan Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wiwynn Corp and Elan Microelectronics Corp, you can compare the effects of market volatilities on Wiwynn Corp and Elan Microelectronics 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 Elan Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wiwynn Corp and Elan Microelectronics.
Diversification Opportunities for Wiwynn Corp and Elan Microelectronics
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wiwynn and Elan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Wiwynn Corp and Elan Microelectronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elan Microelectronics 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 Elan Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elan Microelectronics has no effect on the direction of Wiwynn Corp i.e., Wiwynn Corp and Elan Microelectronics go up and down completely randomly.
Pair Corralation between Wiwynn Corp and Elan Microelectronics
Assuming the 90 days trading horizon Wiwynn Corp is expected to generate 1.29 times more return on investment than Elan Microelectronics. However, Wiwynn Corp is 1.29 times more volatile than Elan Microelectronics Corp. It trades about 0.15 of its potential returns per unit of risk. Elan Microelectronics Corp is currently generating about -0.06 per unit of risk. If you would invest 197,000 in Wiwynn Corp on August 27, 2024 and sell it today you would earn a total of 16,000 from holding Wiwynn Corp or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wiwynn Corp vs. Elan Microelectronics Corp
Performance |
| Timeline |
| Wiwynn Corp |
| Elan Microelectronics |
Wiwynn Corp and Elan Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wiwynn Corp and Elan Microelectronics
The main advantage of trading using opposite Wiwynn Corp and Elan Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wiwynn Corp position performs unexpectedly, Elan Microelectronics 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 Elan Microelectronics will offset losses from the drop in Elan Microelectronics' long position.| Wiwynn Corp vs. Aspeed Technology | Wiwynn Corp vs. Unimicron Technology Corp | Wiwynn Corp vs. Asmedia Technology | Wiwynn Corp vs. Novatek Microelectronics Corp |
| Elan Microelectronics vs. Novatek Microelectronics Corp | Elan Microelectronics vs. Quanta Computer | Elan Microelectronics vs. United Microelectronics |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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