Correlation Between WIMFARM SA and TDK
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and TDK 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 WIMFARM SA and TDK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and TDK Corporation, you can compare the effects of market volatilities on WIMFARM SA and TDK 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 WIMFARM SA with a short position of TDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and TDK.
Diversification Opportunities for WIMFARM SA and TDK
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between WIMFARM and TDK is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and TDK Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDK Corporation and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with TDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDK Corporation has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and TDK go up and down completely randomly.
Pair Corralation between WIMFARM SA and TDK
Assuming the 90 days horizon WIMFARM SA EO is expected to generate 1.5 times more return on investment than TDK. However, WIMFARM SA is 1.5 times more volatile than TDK Corporation. It trades about -0.12 of its potential returns per unit of risk. TDK Corporation is currently generating about -0.21 per unit of risk. If you would invest 383.00 in WIMFARM SA EO on November 6, 2024 and sell it today you would lose (44.00) from holding WIMFARM SA EO or give up 11.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. TDK Corp.
Performance |
| Timeline |
| WIMFARM SA EO |
| TDK Corporation |
WIMFARM SA and TDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and TDK
The main advantage of trading using opposite WIMFARM SA and TDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, TDK 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 TDK will offset losses from the drop in TDK's long position.| WIMFARM SA vs. KINGBOARD CHEMICAL | WIMFARM SA vs. Eastman Chemical | WIMFARM SA vs. CARSALESCOM | WIMFARM SA vs. Mitsubishi Gas Chemical |
| TDK vs. GOODYEAR T RUBBER | TDK vs. Air Transport Services | TDK vs. EVS Broadcast Equipment | TDK vs. Goodyear Tire Rubber |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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