Correlation Between Wiwynn Corp and Lihtai Construction
Can any of the company-specific risk be diversified away by investing in both Wiwynn Corp and Lihtai Construction 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 Lihtai Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wiwynn Corp and Lihtai Construction Enterprise, you can compare the effects of market volatilities on Wiwynn Corp and Lihtai Construction 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 Lihtai Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wiwynn Corp and Lihtai Construction.
Diversification Opportunities for Wiwynn Corp and Lihtai Construction
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wiwynn and Lihtai is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wiwynn Corp and Lihtai Construction Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lihtai Construction 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 Lihtai Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lihtai Construction has no effect on the direction of Wiwynn Corp i.e., Wiwynn Corp and Lihtai Construction go up and down completely randomly.
Pair Corralation between Wiwynn Corp and Lihtai Construction
Assuming the 90 days trading horizon Wiwynn Corp is expected to generate 2.3 times more return on investment than Lihtai Construction. However, Wiwynn Corp is 2.3 times more volatile than Lihtai Construction Enterprise. It trades about 0.06 of its potential returns per unit of risk. Lihtai Construction Enterprise is currently generating about 0.05 per unit of risk. If you would invest 109,128 in Wiwynn Corp on September 2, 2024 and sell it today you would earn a total of 84,372 from holding Wiwynn Corp or generate 77.31% 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. Lihtai Construction Enterprise
Performance |
| Timeline |
| Wiwynn Corp |
| Lihtai Construction |
Wiwynn Corp and Lihtai Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wiwynn Corp and Lihtai Construction
The main advantage of trading using opposite Wiwynn Corp and Lihtai Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wiwynn Corp position performs unexpectedly, Lihtai Construction 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 Lihtai Construction will offset losses from the drop in Lihtai Construction's long position.| Wiwynn Corp vs. Aspeed Technology | Wiwynn Corp vs. Unimicron Technology Corp | Wiwynn Corp vs. Asmedia Technology | Wiwynn Corp vs. Novatek Microelectronics Corp |
| Lihtai Construction vs. Data International Co | Lihtai Construction vs. Dimerco Data System | Lihtai Construction vs. K Way Information | Lihtai Construction vs. Newretail Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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