Correlation Between Leadtek Research and Wiwynn Corp

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

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

Diversification Opportunities for Leadtek Research and Wiwynn Corp

0.32

Correlation Coefficient

Leadtek Research  Wiwynn Corp

Weak diversification

The 3 months correlation between Leadtek and Wiwynn is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Leadtek Research and Wiwynn Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wiwynn Corp and Leadtek Research 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 Leadtek Research are associated (or correlated) with Wiwynn Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wiwynn Corp has no effect on the direction of Leadtek Research i.e., Leadtek Research and Wiwynn Corp go up and down completely randomly.

Pair Corralation between Leadtek Research and Wiwynn Corp

Assuming the 90 days trading horizon Leadtek Research is expected to generate 0.9 times more return on investment than Wiwynn Corp. However, Leadtek Research is 1.11 times less risky than Wiwynn Corp. It trades about -0.1 of its potential returns per unit of risk. Wiwynn Corp is currently generating about -0.19 per unit of risk. If you would invest  7,190  in Leadtek Research on December 30, 2024 and sell it today you would lose (1,180) from holding Leadtek Research or give up 16.41% of portfolio value over 90 days.

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

Leadtek Research  vs.  Wiwynn Corp

Leadtek Research

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leadtek Research has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Wiwynn Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wiwynn Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Leadtek Research and Wiwynn Corp

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

The idea behind Leadtek Research and Wiwynn Corp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.