Correlation Between Sysage Technology and Wistron Information

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

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

Diversification Opportunities for Sysage Technology and Wistron Information

0.09

Correlation Coefficient

Sysage Technology  Wistron Information

Significant diversification

The 3 months correlation between Sysage and Wistron is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sysage Technology Co and Wistron Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wistron Information and Sysage Technology 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 Sysage Technology Co 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 Sysage Technology i.e., Sysage Technology and Wistron Information go up and down completely randomly.

Pair Corralation between Sysage Technology and Wistron Information

Assuming the 90 days trading horizon Sysage Technology Co is expected to generate 1.32 times more return on investment than Wistron Information. However, Sysage Technology is 1.32 times more volatile than Wistron Information Technology. It trades about 0.12 of its potential returns per unit of risk. Wistron Information Technology is currently generating about 0.02 per unit of risk. If you would invest  4,780  in Sysage Technology Co on December 3, 2024 and sell it today you would earn a total of  1,210  from holding Sysage Technology Co or generate 25.31% return on investment over 90 days.

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

Sysage Technology Co  vs.  Wistron Information Technology

Sysage Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sysage Technology Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sysage Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Wistron Information

Risk-Adjusted Performance

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 Sysage Technology and Wistron Information

The main advantage of trading using opposite Sysage Technology and Wistron Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sysage Technology 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 Sysage Technology Co 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.