Correlation Between Wistron Corp and Hu Lane
Can any of the company-specific risk be diversified away by investing in both Wistron Corp and Hu Lane 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 Wistron Corp and Hu Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wistron Corp and Hu Lane Associate, you can compare the effects of market volatilities on Wistron Corp and Hu Lane 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 Wistron Corp with a short position of Hu Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron Corp and Hu Lane.
Diversification Opportunities for Wistron Corp and Hu Lane
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wistron and 6279 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Wistron Corp and Hu Lane Associate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hu Lane Associate and Wistron Corp 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 Wistron Corp are associated (or correlated) with Hu Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hu Lane Associate has no effect on the direction of Wistron Corp i.e., Wistron Corp and Hu Lane go up and down completely randomly.
Pair Corralation between Wistron Corp and Hu Lane
Assuming the 90 days trading horizon Wistron Corp is expected to under-perform the Hu Lane. In addition to that, Wistron Corp is 1.5 times more volatile than Hu Lane Associate. It trades about -0.36 of its total potential returns per unit of risk. Hu Lane Associate is currently generating about 0.21 per unit of volatility. If you would invest 16,950 in Hu Lane Associate on September 24, 2024 and sell it today you would earn a total of 1,000.00 from holding Hu Lane Associate or generate 5.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wistron Corp vs. Hu Lane Associate
Performance |
Timeline |
Wistron Corp |
Hu Lane Associate |
Wistron Corp and Hu Lane Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wistron Corp and Hu Lane
The main advantage of trading using opposite Wistron Corp and Hu Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron Corp position performs unexpectedly, Hu Lane 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 Hu Lane will offset losses from the drop in Hu Lane's long position.Wistron Corp vs. Century Wind Power | Wistron Corp vs. Green World Fintech | Wistron Corp vs. Ingentec | Wistron Corp vs. Chaheng Precision Co |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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