Correlation Between Posiflex Technology and Wei Chuan
Can any of the company-specific risk be diversified away by investing in both Posiflex Technology 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 Posiflex Technology and Wei Chuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Posiflex Technology and Wei Chuan Foods, you can compare the effects of market volatilities on Posiflex Technology 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 Posiflex Technology with a short position of Wei Chuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and Wei Chuan.
Diversification Opportunities for Posiflex Technology and Wei Chuan
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Posiflex and Wei is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology 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 Posiflex Technology 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 Posiflex Technology 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 Posiflex Technology i.e., Posiflex Technology and Wei Chuan go up and down completely randomly.
Pair Corralation between Posiflex Technology and Wei Chuan
Assuming the 90 days trading horizon Posiflex Technology is expected to generate 5.7 times more return on investment than Wei Chuan. However, Posiflex Technology is 5.7 times more volatile than Wei Chuan Foods. It trades about 0.26 of its potential returns per unit of risk. Wei Chuan Foods is currently generating about -0.02 per unit of risk. If you would invest 21,600 in Posiflex Technology on October 25, 2024 and sell it today you would earn a total of 12,050 from holding Posiflex Technology or generate 55.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Posiflex Technology vs. Wei Chuan Foods
Performance |
| Timeline |
| Posiflex Technology |
| Wei Chuan Foods |
Posiflex Technology and Wei Chuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posiflex Technology and Wei Chuan
The main advantage of trading using opposite Posiflex Technology and Wei Chuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posiflex Technology 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.| Posiflex Technology vs. Flytech Technology Co | Posiflex Technology vs. Advantech Co | Posiflex Technology vs. Ennoconn Corp | Posiflex Technology vs. Chenbro Micom Co |
| Wei Chuan vs. Uni President Enterprises Corp | Wei Chuan vs. Taisun Enterprise Co | Wei Chuan vs. AGV Products Corp | Wei Chuan vs. Great Wall 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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