Correlation Between Tamul Multimedia and Wintec

Can any of the company-specific risk be diversified away by investing in both Tamul Multimedia and Wintec 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 Tamul Multimedia and Wintec into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tamul Multimedia Co and Wintec Co, you can compare the effects of market volatilities on Tamul Multimedia and Wintec 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 Tamul Multimedia with a short position of Wintec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamul Multimedia and Wintec.

Diversification Opportunities for Tamul Multimedia and Wintec

0.6

Correlation Coefficient

Tamul Multimedia  Wintec

Poor diversification

The 3 months correlation between Tamul and Wintec is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tamul Multimedia Co and Wintec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintec and Tamul Multimedia 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 Tamul Multimedia Co are associated (or correlated) with Wintec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintec has no effect on the direction of Tamul Multimedia i.e., Tamul Multimedia and Wintec go up and down completely randomly.

Pair Corralation between Tamul Multimedia and Wintec

Assuming the 90 days trading horizon Tamul Multimedia is expected to generate 2.78 times less return on investment than Wintec. In addition to that, Tamul Multimedia is 1.68 times more volatile than Wintec Co. It trades about 0.01 of its total potential returns per unit of risk. Wintec Co is currently generating about 0.06 per unit of volatility. If you would invest  236,500  in Wintec Co on December 24, 2024 and sell it today you would earn a total of  23,500  from holding Wintec Co or generate 9.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Tamul Multimedia Co  vs.  Wintec Co

Tamul Multimedia

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tamul Multimedia Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tamul Multimedia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wintec

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wintec Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wintec sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tamul Multimedia and Wintec

The main advantage of trading using opposite Tamul Multimedia and Wintec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamul Multimedia position performs unexpectedly, Wintec 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 Wintec will offset losses from the drop in Wintec's long position.

The idea behind Tamul Multimedia Co and Wintec Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.