Correlation Between Acer E and Wei Chuan
Can any of the company-specific risk be diversified away by investing in both Acer E and Wei Chuan 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 Acer E and Wei Chuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acer E Enabling Service and Wei Chuan Foods, you can compare the effects of market volatilities on Acer E and Wei Chuan 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 Acer E with a short position of Wei Chuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acer E and Wei Chuan.
Diversification Opportunities for Acer E and Wei Chuan
Average diversification
The 3 months correlation between Acer and Wei is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Acer E Enabling Service and Wei Chuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wei Chuan Foods and Acer E 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 Acer E Enabling Service are associated (or correlated) with Wei Chuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wei Chuan Foods has no effect on the direction of Acer E i.e., Acer E and Wei Chuan go up and down completely randomly.
Pair Corralation between Acer E and Wei Chuan
Assuming the 90 days trading horizon Acer E Enabling Service is expected to under-perform the Wei Chuan. In addition to that, Acer E is 2.82 times more volatile than Wei Chuan Foods. It trades about -0.04 of its total potential returns per unit of risk. Wei Chuan Foods is currently generating about 0.03 per unit of volatility. If you would invest 1,820 in Wei Chuan Foods on September 3, 2024 and sell it today you would earn a total of 10.00 from holding Wei Chuan Foods or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acer E Enabling Service vs. Wei Chuan Foods
Performance |
| Timeline |
| Acer E Enabling |
| Wei Chuan Foods |
Acer E and Wei Chuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acer E and Wei Chuan
The main advantage of trading using opposite Acer E and Wei Chuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acer E position performs unexpectedly, Wei Chuan 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 Wei Chuan will offset losses from the drop in Wei Chuan's long position.| Acer E vs. WINSON Machinery Co | Acer E vs. International CSRC Investment | Acer E vs. Kao Fong Machinery | Acer E vs. Founding Construction Development |
| Wei Chuan vs. Standard Foods Corp | Wei Chuan vs. TTET Union Corp | Wei Chuan vs. Uni President Enterprises Corp | Wei Chuan vs. Charoen Pokphand Enterprise |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world |