Correlation Between Wintao Communications and ROPEOK Technology

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Can any of the company-specific risk be diversified away by investing in both Wintao Communications and ROPEOK Technology 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 Wintao Communications and ROPEOK Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wintao Communications Co and ROPEOK Technology Group, you can compare the effects of market volatilities on Wintao Communications and ROPEOK Technology 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 Wintao Communications with a short position of ROPEOK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintao Communications and ROPEOK Technology.

Diversification Opportunities for Wintao Communications and ROPEOK Technology

WintaoROPEOKDiversified AwayWintaoROPEOKDiversified Away100%
0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Wintao and ROPEOK is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Wintao Communications Co and ROPEOK Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROPEOK Technology and Wintao Communications 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 Wintao Communications Co are associated (or correlated) with ROPEOK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROPEOK Technology has no effect on the direction of Wintao Communications i.e., Wintao Communications and ROPEOK Technology go up and down completely randomly.

Pair Corralation between Wintao Communications and ROPEOK Technology

Assuming the 90 days trading horizon Wintao Communications Co is expected to under-perform the ROPEOK Technology. But the stock apears to be less risky and, when comparing its historical volatility, Wintao Communications Co is 1.1 times less risky than ROPEOK Technology. The stock trades about -0.02 of its potential returns per unit of risk. The ROPEOK Technology Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  773.00  in ROPEOK Technology Group on October 11, 2024 and sell it today you would earn a total of  43.00  from holding ROPEOK Technology Group or generate 5.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Wintao Communications Co  vs.  ROPEOK Technology Group

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -100102030
JavaScript chart by amCharts 3.21.15301139 688619
       Timeline  
Wintao Communications 

Risk-Adjusted Performance

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Over the last 90 days Wintao Communications Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Wintao Communications is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan20212223242526
ROPEOK Technology 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ROPEOK Technology Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ROPEOK Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan88.599.51010.5

Wintao Communications and ROPEOK Technology Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.89-4.41-2.93-1.450.01.412.844.275.7 0.0220.0240.0260.0280.030
JavaScript chart by amCharts 3.21.15301139 688619
       Returns  

Pair Trading with Wintao Communications and ROPEOK Technology

The main advantage of trading using opposite Wintao Communications and ROPEOK Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintao Communications position performs unexpectedly, ROPEOK Technology 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 ROPEOK Technology will offset losses from the drop in ROPEOK Technology's long position.
The idea behind Wintao Communications Co and ROPEOK Technology Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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