Correlation Between Wialan Technologies and Nidec
Can any of the company-specific risk be diversified away by investing in both Wialan Technologies and Nidec 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 Nidec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wialan Technologies and Nidec, you can compare the effects of market volatilities on Wialan Technologies and Nidec 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 Nidec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wialan Technologies and Nidec.
Diversification Opportunities for Wialan Technologies and Nidec
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wialan and Nidec is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Wialan Technologies and Nidec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidec 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 Nidec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidec has no effect on the direction of Wialan Technologies i.e., Wialan Technologies and Nidec go up and down completely randomly.
Pair Corralation between Wialan Technologies and Nidec
Given the investment horizon of 90 days Wialan Technologies is expected to generate 1.91 times more return on investment than Nidec. However, Wialan Technologies is 1.91 times more volatile than Nidec. It trades about -0.03 of its potential returns per unit of risk. Nidec is currently generating about -0.08 per unit of risk. If you would invest 0.13 in Wialan Technologies on September 3, 2024 and sell it today you would lose (0.02) from holding Wialan Technologies or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wialan Technologies vs. Nidec
Performance |
| Timeline |
| Wialan Technologies |
| Nidec |
Wialan Technologies and Nidec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wialan Technologies and Nidec
The main advantage of trading using opposite Wialan Technologies and Nidec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wialan Technologies position performs unexpectedly, Nidec 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 Nidec will offset losses from the drop in Nidec's 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 |
| Nidec vs. Dear Cashmere Holding | Nidec vs. Goff Corp | Nidec vs. Wialan Technologies | Nidec vs. Cgrowth Capital |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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