Correlation Between WinMate Communication and Trade Van

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

Diversification Opportunities for WinMate Communication and Trade Van

0.88

Correlation Coefficient

WinMate Communication  Trade Van

Very poor diversification

The 3 months correlation between WinMate and Trade is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding WinMate Communication INC and Trade Van Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Van 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 Trade Van. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Van Information has no effect on the direction of WinMate Communication i.e., WinMate Communication and Trade Van go up and down completely randomly.

Pair Corralation between WinMate Communication and Trade Van

Assuming the 90 days trading horizon WinMate Communication INC is expected to generate 2.48 times more return on investment than Trade Van. However, WinMate Communication is 2.48 times more volatile than Trade Van Information Services. It trades about 0.09 of its potential returns per unit of risk. Trade Van Information Services is currently generating about 0.11 per unit of risk. If you would invest  8,430  in WinMate Communication INC on October 11, 2024 and sell it today you would earn a total of  8,720  from holding WinMate Communication INC or generate 103.44% return on investment over 90 days.

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

WinMate Communication INC  vs.  Trade Van Information Services

WinMate Communication INC

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WinMate Communication INC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, WinMate Communication showed solid returns over the last few months and may actually be approaching a breakup point.

Trade Van Information

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Trade Van Information Services are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Trade Van showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WinMate Communication and Trade Van

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

The idea behind WinMate Communication INC and Trade Van Information Services 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.