Correlation Between WinMate Communication and Dimension Computer
Can any of the company-specific risk be diversified away by investing in both WinMate Communication and Dimension 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 Dimension 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 Dimension Computer Technology, you can compare the effects of market volatilities on WinMate Communication and Dimension 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 Dimension Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinMate Communication and Dimension Computer.
Diversification Opportunities for WinMate Communication and Dimension Computer
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between WinMate and Dimension is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Dimension Computer Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimension 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 Dimension Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimension Computer has no effect on the direction of WinMate Communication i.e., WinMate Communication and Dimension Computer go up and down completely randomly.
Pair Corralation between WinMate Communication and Dimension Computer
Assuming the 90 days trading horizon WinMate Communication INC is expected to generate 0.56 times more return on investment than Dimension Computer. However, WinMate Communication INC is 1.79 times less risky than Dimension Computer. It trades about 0.04 of its potential returns per unit of risk. Dimension Computer Technology is currently generating about -0.02 per unit of risk. If you would invest 14,650 in WinMate Communication INC on September 26, 2024 and sell it today you would earn a total of 450.00 from holding WinMate Communication INC or generate 3.07% 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. Dimension Computer Technology
Performance |
Timeline |
WinMate Communication INC |
Dimension Computer |
WinMate Communication and Dimension Computer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WinMate Communication and Dimension Computer
The main advantage of trading using opposite WinMate Communication and Dimension Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinMate Communication position performs unexpectedly, Dimension 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 Dimension Computer will offset losses from the drop in Dimension Computer's long position.WinMate Communication vs. Advantech 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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