Correlation Between WinMate Communication and Transcend Information

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

By analyzing existing cross correlation between WinMate Communication INC and Transcend Information, you can compare the effects of market volatilities on WinMate Communication and Transcend Information 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 WinMate Communication with a short position of Transcend Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Transcend Information.

Diversification Opportunities for WinMate Communication and Transcend Information

-0.44

Correlation Coefficient

WinMate Communication  Transcend Information

Very good diversification

The 3 months correlation between WinMate and Transcend is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Transcend Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcend Information and WinMate Communication 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 WinMate Communication INC are associated (or correlated) with Transcend Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcend Information has no effect on the direction of WinMate Communication i.e., WinMate Communication and Transcend Information go up and down completely randomly.

Pair Corralation between WinMate Communication and Transcend Information

Assuming the 90 days trading horizon WinMate Communication is expected to generate 3.46 times less return on investment than Transcend Information. In addition to that, WinMate Communication is 1.3 times more volatile than Transcend Information. It trades about 0.03 of its total potential returns per unit of risk. Transcend Information is currently generating about 0.15 per unit of volatility. If you would invest  8,840  in Transcend Information on December 24, 2024 and sell it today you would earn a total of  1,410  from holding Transcend Information or generate 15.95% return on investment over 90 days.

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

WinMate Communication INC  vs.  Transcend Information

WinMate Communication INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WinMate Communication INC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, WinMate Communication is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Transcend Information

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transcend Information are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Transcend Information showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WinMate Communication and Transcend Information

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

The idea behind WinMate Communication INC and Transcend Information 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.