Correlation Between Cipherlab and Wah Hong
Can any of the company-specific risk be diversified away by investing in both Cipherlab and Wah Hong 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 Cipherlab and Wah Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cipherlab Co and Wah Hong Industrial, you can compare the effects of market volatilities on Cipherlab and Wah Hong 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 Cipherlab with a short position of Wah Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cipherlab and Wah Hong.
Diversification Opportunities for Cipherlab and Wah Hong
Good diversification
The 3 months correlation between Cipherlab and Wah is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cipherlab Co and Wah Hong Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Hong Industrial and Cipherlab 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 Cipherlab Co are associated (or correlated) with Wah Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Hong Industrial has no effect on the direction of Cipherlab i.e., Cipherlab and Wah Hong go up and down completely randomly.
Pair Corralation between Cipherlab and Wah Hong
Assuming the 90 days trading horizon Cipherlab Co is expected to generate 1.37 times more return on investment than Wah Hong. However, Cipherlab is 1.37 times more volatile than Wah Hong Industrial. It trades about 0.04 of its potential returns per unit of risk. Wah Hong Industrial is currently generating about 0.06 per unit of risk. If you would invest 1,649 in Cipherlab Co on September 25, 2024 and sell it today you would earn a total of 796.00 from holding Cipherlab Co or generate 48.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cipherlab Co vs. Wah Hong Industrial
Performance |
Timeline |
Cipherlab |
Wah Hong Industrial |
Cipherlab and Wah Hong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cipherlab and Wah Hong
The main advantage of trading using opposite Cipherlab and Wah Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipherlab position performs unexpectedly, Wah Hong 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 Wah Hong will offset losses from the drop in Wah Hong's long position.Cipherlab vs. GeoVision | Cipherlab vs. Flytech Technology Co | Cipherlab vs. Quanta Storage | Cipherlab vs. Coretronic |
Wah Hong vs. Advantech Co | Wah Hong vs. IEI Integration Corp | Wah Hong vs. Flytech Technology Co | Wah Hong vs. Ennoconn Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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