Correlation Between Concord Securities and WinMate Communication

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

By analyzing existing cross correlation between Concord Securities Co and WinMate Communication INC, you can compare the effects of market volatilities on Concord Securities and WinMate Communication 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 Concord Securities with a short position of WinMate Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Securities and WinMate Communication.

Diversification Opportunities for Concord Securities and WinMate Communication

-0.63

Correlation Coefficient

Concord Securities  WinMate Communication

Excellent diversification

The 3 months correlation between Concord and WinMate is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Concord Securities Co and WinMate Communication INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WinMate Communication INC and Concord Securities 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 Concord Securities Co are associated (or correlated) with WinMate Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WinMate Communication INC has no effect on the direction of Concord Securities i.e., Concord Securities and WinMate Communication go up and down completely randomly.

Pair Corralation between Concord Securities and WinMate Communication

Assuming the 90 days trading horizon Concord Securities is expected to generate 2.39 times less return on investment than WinMate Communication. In addition to that, Concord Securities is 1.18 times more volatile than WinMate Communication INC. It trades about 0.03 of its total potential returns per unit of risk. WinMate Communication INC is currently generating about 0.07 per unit of volatility. If you would invest  12,500  in WinMate Communication INC on October 6, 2024 and sell it today you would earn a total of  4,600  from holding WinMate Communication INC or generate 36.8% return on investment over 90 days.

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

Concord Securities Co  vs.  WinMate Communication INC

Concord Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concord Securities Co 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.

WinMate Communication INC

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WinMate Communication INC are ranked lower than 15 (%) 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.

Pair Trading with Concord Securities and WinMate Communication

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

The idea behind Concord Securities Co and WinMate Communication INC 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.