Correlation Between New Concept and Wetouch Technology
Can any of the company-specific risk be diversified away by investing in both New Concept and Wetouch Technology 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 New Concept and Wetouch Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Concept Energy and Wetouch Technology Common, you can compare the effects of market volatilities on New Concept and Wetouch Technology 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 New Concept with a short position of Wetouch Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Concept and Wetouch Technology.
Diversification Opportunities for New Concept and Wetouch Technology
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between New and Wetouch is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding New Concept Energy and Wetouch Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wetouch Technology Common and New Concept 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 New Concept Energy are associated (or correlated) with Wetouch Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wetouch Technology Common has no effect on the direction of New Concept i.e., New Concept and Wetouch Technology go up and down completely randomly.
Pair Corralation between New Concept and Wetouch Technology
Considering the 90-day investment horizon New Concept Energy is expected to generate 0.49 times more return on investment than Wetouch Technology. However, New Concept Energy is 2.03 times less risky than Wetouch Technology. It trades about 0.0 of its potential returns per unit of risk. Wetouch Technology Common is currently generating about -0.02 per unit of risk. If you would invest 118.00 in New Concept Energy on September 26, 2024 and sell it today you would lose (1.00) from holding New Concept Energy or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Concept Energy vs. Wetouch Technology Common
Performance |
| Timeline |
| New Concept Energy |
| Wetouch Technology Common |
New Concept and Wetouch Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Concept and Wetouch Technology
The main advantage of trading using opposite New Concept and Wetouch Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Concept position performs unexpectedly, Wetouch Technology 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 Wetouch Technology will offset losses from the drop in Wetouch Technology's long position.| New Concept vs. Marcus Millichap | New Concept vs. J W Mays | New Concept vs. Frp Holdings Ord | New Concept vs. Maui Land Pineapple |
| Wetouch Technology vs. Western Capital Resources | Wetouch Technology vs. Tree Island Steel | Wetouch Technology vs. Santeon Group | Wetouch Technology vs. Ferrexpo PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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