Correlation Between Ingentec and Wistron Information

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

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

Diversification Opportunities for Ingentec and Wistron Information

-0.22

Correlation Coefficient

Ingentec  Wistron Information

Very good diversification

The 3 months correlation between Ingentec and Wistron is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Wistron Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wistron Information and Ingentec 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 Ingentec are associated (or correlated) with Wistron Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wistron Information has no effect on the direction of Ingentec i.e., Ingentec and Wistron Information go up and down completely randomly.

Pair Corralation between Ingentec and Wistron Information

Assuming the 90 days trading horizon Ingentec is expected to generate 1.21 times less return on investment than Wistron Information. In addition to that, Ingentec is 1.19 times more volatile than Wistron Information Technology. It trades about 0.03 of its total potential returns per unit of risk. Wistron Information Technology is currently generating about 0.04 per unit of volatility. If you would invest  7,967  in Wistron Information Technology on October 4, 2024 and sell it today you would earn a total of  3,383  from holding Wistron Information Technology or generate 42.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Ingentec  vs.  Wistron Information Technology

Ingentec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingentec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Wistron Information

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wistron Information Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Wistron Information is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ingentec and Wistron Information

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

The idea behind Ingentec and Wistron Information Technology 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.