Correlation Between WT Microelectronics and Macroblock

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

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

Diversification Opportunities for WT Microelectronics and Macroblock

-0.91

Correlation Coefficient

WT Microelectronics  Macroblock

Pay attention - limited upside

The 3 months correlation between 3036A and Macroblock is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding WT Microelectronics Co and Macroblock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macroblock and WT Microelectronics 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 WT Microelectronics Co are associated (or correlated) with Macroblock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macroblock has no effect on the direction of WT Microelectronics i.e., WT Microelectronics and Macroblock go up and down completely randomly.

Pair Corralation between WT Microelectronics and Macroblock

Assuming the 90 days trading horizon WT Microelectronics Co is expected to generate 0.07 times more return on investment than Macroblock. However, WT Microelectronics Co is 15.31 times less risky than Macroblock. It trades about 0.18 of its potential returns per unit of risk. Macroblock is currently generating about -0.35 per unit of risk. If you would invest  4,945  in WT Microelectronics Co on September 27, 2024 and sell it today you would earn a total of  15.00  from holding WT Microelectronics Co or generate 0.3% return on investment over 90 days.

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

WT Microelectronics Co  vs.  Macroblock

WT Microelectronics

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in WT Microelectronics Co are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, WT Microelectronics is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Macroblock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macroblock 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with WT Microelectronics and Macroblock

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

The idea behind WT Microelectronics Co and Macroblock 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.