Correlation Between Wah Fu and Winmark
Can any of the company-specific risk be diversified away by investing in both Wah Fu and Winmark 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 Wah Fu and Winmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wah Fu Education and Winmark, you can compare the effects of market volatilities on Wah Fu and Winmark 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 Wah Fu with a short position of Winmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Fu and Winmark.
Diversification Opportunities for Wah Fu and Winmark
Very good diversification
The 3 months correlation between Wah and Winmark is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wah Fu Education and Winmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winmark and Wah Fu 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 Wah Fu Education are associated (or correlated) with Winmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winmark has no effect on the direction of Wah Fu i.e., Wah Fu and Winmark go up and down completely randomly.
Pair Corralation between Wah Fu and Winmark
Given the investment horizon of 90 days Wah Fu Education is expected to generate 1.83 times more return on investment than Winmark. However, Wah Fu is 1.83 times more volatile than Winmark. It trades about 0.05 of its potential returns per unit of risk. Winmark is currently generating about -0.1 per unit of risk. If you would invest 172.00 in Wah Fu Education on November 18, 2024 and sell it today you would earn a total of 4.00 from holding Wah Fu Education or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wah Fu Education vs. Winmark
Performance |
| Timeline |
| Wah Fu Education |
| Winmark |
Wah Fu and Winmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wah Fu and Winmark
The main advantage of trading using opposite Wah Fu and Winmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Fu position performs unexpectedly, Winmark 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 Winmark will offset losses from the drop in Winmark's long position.| Wah Fu vs. Gaotu Techedu DRC | Wah Fu vs. TAL Education Group | Wah Fu vs. Strategic Education | Wah Fu vs. Vasta Platform |
| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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