Correlation Between Wialan Technologies and Frequency Electronics
Can any of the company-specific risk be diversified away by investing in both Wialan Technologies and Frequency Electronics 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 Wialan Technologies and Frequency Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wialan Technologies and Frequency Electronics, you can compare the effects of market volatilities on Wialan Technologies and Frequency Electronics 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 Wialan Technologies with a short position of Frequency Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wialan Technologies and Frequency Electronics.
Diversification Opportunities for Wialan Technologies and Frequency Electronics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wialan and Frequency is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Wialan Technologies and Frequency Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Electronics and Wialan Technologies 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 Wialan Technologies are associated (or correlated) with Frequency Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Electronics has no effect on the direction of Wialan Technologies i.e., Wialan Technologies and Frequency Electronics go up and down completely randomly.
Pair Corralation between Wialan Technologies and Frequency Electronics
Given the investment horizon of 90 days Wialan Technologies is expected to generate 2.58 times more return on investment than Frequency Electronics. However, Wialan Technologies is 2.58 times more volatile than Frequency Electronics. It trades about 0.04 of its potential returns per unit of risk. Frequency Electronics is currently generating about 0.07 per unit of risk. If you would invest 0.11 in Wialan Technologies on November 4, 2024 and sell it today you would lose (0.02) from holding Wialan Technologies or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wialan Technologies vs. Frequency Electronics
Performance |
| Timeline |
| Wialan Technologies |
| Frequency Electronics |
Wialan Technologies and Frequency Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wialan Technologies and Frequency Electronics
The main advantage of trading using opposite Wialan Technologies and Frequency Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wialan Technologies position performs unexpectedly, Frequency Electronics 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 Frequency Electronics will offset losses from the drop in Frequency Electronics' long position.| Wialan Technologies vs. Genesis Electronics Group | Wialan Technologies vs. Global Develpmts | Wialan Technologies vs. XCPCNL Business Services | Wialan Technologies vs. TonnerOne World Holdings |
| Frequency Electronics vs. BK Technologies | Frequency Electronics vs. Actelis Networks | Frequency Electronics vs. Lantronix | Frequency Electronics vs. KVH Industries |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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