Correlation Between Western Capital and Wetouch Technology
Can any of the company-specific risk be diversified away by investing in both Western Capital 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 Western Capital and Wetouch Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Capital Resources and Wetouch Technology Common, you can compare the effects of market volatilities on Western Capital 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 Western Capital with a short position of Wetouch Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Capital and Wetouch Technology.
Diversification Opportunities for Western Capital and Wetouch Technology
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Wetouch is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Western Capital Resources 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 Western Capital 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 Western Capital Resources 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 Western Capital i.e., Western Capital and Wetouch Technology go up and down completely randomly.
Pair Corralation between Western Capital and Wetouch Technology
Given the investment horizon of 90 days Western Capital Resources is expected to generate 0.47 times more return on investment than Wetouch Technology. However, Western Capital Resources is 2.15 times less risky than Wetouch Technology. It trades about 0.34 of its potential returns per unit of risk. Wetouch Technology Common is currently generating about 0.03 per unit of risk. If you would invest 800.00 in Western Capital Resources on September 1, 2024 and sell it today you would earn a total of 128.00 from holding Western Capital Resources or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Capital Resources vs. Wetouch Technology Common
Performance |
| Timeline |
| Western Capital Resources |
| Wetouch Technology Common |
Western Capital and Wetouch Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Capital and Wetouch Technology
The main advantage of trading using opposite Western Capital and Wetouch Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Capital 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.| Western Capital vs. Porsche Automobile Holding | Western Capital vs. Ferrari NV | Western Capital vs. Toyota Motor | Western Capital vs. General Motors |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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