Correlation Between Wintec Co and NEOWIZ HOLDINGS

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

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

Diversification Opportunities for Wintec Co and NEOWIZ HOLDINGS

-0.06

Correlation Coefficient

Wintec Co  NEOWIZ HOLDINGS

Good diversification

The 3 months correlation between Wintec and NEOWIZ is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Wintec Co and NEOWIZ HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOWIZ HOLDINGS and Wintec Co 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 Wintec Co are associated (or correlated) with NEOWIZ HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOWIZ HOLDINGS has no effect on the direction of Wintec Co i.e., Wintec Co and NEOWIZ HOLDINGS go up and down completely randomly.

Pair Corralation between Wintec Co and NEOWIZ HOLDINGS

Assuming the 90 days trading horizon Wintec Co is expected to generate 1.83 times more return on investment than NEOWIZ HOLDINGS. However, Wintec Co is 1.83 times more volatile than NEOWIZ HOLDINGS. It trades about 0.03 of its potential returns per unit of risk. NEOWIZ HOLDINGS is currently generating about 0.01 per unit of risk. If you would invest  235,000  in Wintec Co on September 18, 2024 and sell it today you would earn a total of  34,500  from holding Wintec Co or generate 14.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Wintec Co  vs.  NEOWIZ HOLDINGS

Wintec Co

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wintec Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wintec Co may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NEOWIZ HOLDINGS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NEOWIZ HOLDINGS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NEOWIZ HOLDINGS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wintec Co and NEOWIZ HOLDINGS

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

The idea behind Wintec Co and NEOWIZ HOLDINGS 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.