Correlation Between Concraft Holding and Walsin Technology

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

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

Diversification Opportunities for Concraft Holding and Walsin Technology

0.57

Correlation Coefficient

Concraft Holding  Walsin Technology

Very weak diversification

The 3 months correlation between Concraft and Walsin is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Concraft Holding Co and Walsin Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walsin Technology Corp and Concraft Holding 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 Concraft Holding Co are associated (or correlated) with Walsin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walsin Technology Corp has no effect on the direction of Concraft Holding i.e., Concraft Holding and Walsin Technology go up and down completely randomly.

Pair Corralation between Concraft Holding and Walsin Technology

Assuming the 90 days trading horizon Concraft Holding Co is expected to generate 2.1 times more return on investment than Walsin Technology. However, Concraft Holding is 2.1 times more volatile than Walsin Technology Corp. It trades about 0.03 of its potential returns per unit of risk. Walsin Technology Corp is currently generating about 0.01 per unit of risk. If you would invest  1,360  in Concraft Holding Co on October 27, 2024 and sell it today you would earn a total of  295.00  from holding Concraft Holding Co or generate 21.69% return on investment over 90 days.

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

Concraft Holding Co  vs.  Walsin Technology Corp

Concraft Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concraft Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Concraft Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Walsin Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Walsin Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Concraft Holding and Walsin Technology

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

The idea behind Concraft Holding Co and Walsin Technology Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.