Correlation Between WinMate Communication and Jetwell Computer

Can any of the company-specific risk be diversified away by investing in both WinMate Communication and Jetwell Computer 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 Jetwell Computer 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 Jetwell Computer Co, you can compare the effects of market volatilities on WinMate Communication and Jetwell Computer 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 Jetwell Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Jetwell Computer.

Diversification Opportunities for WinMate Communication and Jetwell Computer

-0.05

Correlation Coefficient

WinMate Communication  Jetwell Computer

Good diversification

The 3 months correlation between WinMate and Jetwell is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Jetwell Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetwell Computer 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 Jetwell Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetwell Computer has no effect on the direction of WinMate Communication i.e., WinMate Communication and Jetwell Computer go up and down completely randomly.

Pair Corralation between WinMate Communication and Jetwell Computer

Assuming the 90 days trading horizon WinMate Communication is expected to generate 1.71 times less return on investment than Jetwell Computer. But when comparing it to its historical volatility, WinMate Communication INC is 1.9 times less risky than Jetwell Computer. It trades about 0.14 of its potential returns per unit of risk. Jetwell Computer Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  14,650  in Jetwell Computer Co on September 22, 2024 and sell it today you would earn a total of  2,300  from holding Jetwell Computer Co or generate 15.7% return on investment over 90 days.

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

WinMate Communication INC  vs.  Jetwell Computer Co

WinMate Communication INC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WinMate Communication INC are ranked lower than 1 (%) 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.

Jetwell Computer

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with WinMate Communication and Jetwell Computer

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

The idea behind WinMate Communication INC and Jetwell Computer Co 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.