Correlation Between Power Wind and Tainet Communication
Can any of the company-specific risk be diversified away by investing in both Power Wind and Tainet Communication 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 Power Wind and Tainet Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Wind Health and Tainet Communication System, you can compare the effects of market volatilities on Power Wind and Tainet Communication 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 Power Wind with a short position of Tainet Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Wind and Tainet Communication.
Diversification Opportunities for Power Wind and Tainet Communication
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Power and Tainet is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Power Wind Health and Tainet Communication System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainet Communication and Power Wind 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 Power Wind Health are associated (or correlated) with Tainet Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainet Communication has no effect on the direction of Power Wind i.e., Power Wind and Tainet Communication go up and down completely randomly.
Pair Corralation between Power Wind and Tainet Communication
Assuming the 90 days trading horizon Power Wind Health is expected to generate 0.78 times more return on investment than Tainet Communication. However, Power Wind Health is 1.29 times less risky than Tainet Communication. It trades about 0.11 of its potential returns per unit of risk. Tainet Communication System is currently generating about -0.02 per unit of risk. If you would invest 11,150 in Power Wind Health on October 30, 2024 and sell it today you would earn a total of 250.00 from holding Power Wind Health or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Wind Health vs. Tainet Communication System
Performance |
| Timeline |
| Power Wind Health |
| Tainet Communication |
Power Wind and Tainet Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Wind and Tainet Communication
The main advantage of trading using opposite Power Wind and Tainet Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Wind position performs unexpectedly, Tainet Communication 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 Tainet Communication will offset losses from the drop in Tainet Communication's long position.| Power Wind vs. Sunny Friend Environmental | Power Wind vs. Cleanaway Co | Power Wind vs. Charoen Pokphand Enterprise | Power Wind vs. TTET Union Corp |
| Tainet Communication vs. Asustek Computer | Tainet Communication vs. TWOWAY Communications | Tainet Communication vs. Emerging Display Technologies | Tainet Communication vs. Elitegroup Computer Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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