Correlation Between Cardano and Wah Lee
Can any of the company-specific risk be diversified away by investing in both Cardano and Wah Lee 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 Cardano and Wah Lee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and Wah Lee Industrial, you can compare the effects of market volatilities on Cardano and Wah Lee 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 Cardano with a short position of Wah Lee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Wah Lee.
Diversification Opportunities for Cardano and Wah Lee
Modest diversification
The 3 months correlation between Cardano and Wah is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Wah Lee Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Lee Industrial and Cardano 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 Cardano are associated (or correlated) with Wah Lee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Lee Industrial has no effect on the direction of Cardano i.e., Cardano and Wah Lee go up and down completely randomly.
Pair Corralation between Cardano and Wah Lee
Assuming the 90 days trading horizon Cardano is expected to generate 3.29 times more return on investment than Wah Lee. However, Cardano is 3.29 times more volatile than Wah Lee Industrial. It trades about 0.08 of its potential returns per unit of risk. Wah Lee Industrial is currently generating about 0.04 per unit of risk. If you would invest 39.00 in Cardano on November 2, 2024 and sell it today you would earn a total of 57.00 from holding Cardano or generate 146.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 61.83% |
| Values | Daily Returns |
Cardano vs. Wah Lee Industrial
Performance |
| Timeline |
| Cardano |
| Wah Lee Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cardano and Wah Lee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and Wah Lee
The main advantage of trading using opposite Cardano and Wah Lee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Wah Lee 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 Wah Lee will offset losses from the drop in Wah Lee's long position.The idea behind Cardano and Wah Lee Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |