Correlation Between Wialan Technologies and THK Co
Can any of the company-specific risk be diversified away by investing in both Wialan Technologies and THK Co 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 THK Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wialan Technologies and THK Co Ltd, you can compare the effects of market volatilities on Wialan Technologies and THK Co 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 THK Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wialan Technologies and THK Co.
Diversification Opportunities for Wialan Technologies and THK Co
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wialan and THK is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wialan Technologies and THK Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THK Co 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 THK Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THK Co has no effect on the direction of Wialan Technologies i.e., Wialan Technologies and THK Co go up and down completely randomly.
Pair Corralation between Wialan Technologies and THK Co
Given the investment horizon of 90 days Wialan Technologies is expected to under-perform the THK Co. In addition to that, Wialan Technologies is 1.98 times more volatile than THK Co Ltd. It trades about -0.03 of its total potential returns per unit of risk. THK Co Ltd is currently generating about 0.39 per unit of volatility. If you would invest 830.00 in THK Co Ltd on September 3, 2024 and sell it today you would earn a total of 370.00 from holding THK Co Ltd or generate 44.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wialan Technologies vs. THK Co Ltd
Performance |
| Timeline |
| Wialan Technologies |
| THK Co |
Wialan Technologies and THK Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wialan Technologies and THK Co
The main advantage of trading using opposite Wialan Technologies and THK Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wialan Technologies position performs unexpectedly, THK Co 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 THK Co will offset losses from the drop in THK Co'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 |
| THK Co vs. Dear Cashmere Holding | THK Co vs. Goff Corp | THK Co vs. Wialan Technologies | THK Co 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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