Correlation Between Wah Hong and Gold Rain
Can any of the company-specific risk be diversified away by investing in both Wah Hong and Gold Rain 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 Wah Hong and Gold Rain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wah Hong Industrial and Gold Rain Enterprises, you can compare the effects of market volatilities on Wah Hong and Gold Rain 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 Wah Hong with a short position of Gold Rain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Hong and Gold Rain.
Diversification Opportunities for Wah Hong and Gold Rain
Good diversification
The 3 months correlation between Wah and Gold is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Wah Hong Industrial and Gold Rain Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Rain Enterprises and Wah Hong 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 Wah Hong Industrial are associated (or correlated) with Gold Rain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Rain Enterprises has no effect on the direction of Wah Hong i.e., Wah Hong and Gold Rain go up and down completely randomly.
Pair Corralation between Wah Hong and Gold Rain
Assuming the 90 days trading horizon Wah Hong Industrial is expected to under-perform the Gold Rain. In addition to that, Wah Hong is 1.76 times more volatile than Gold Rain Enterprises. It trades about -0.11 of its total potential returns per unit of risk. Gold Rain Enterprises is currently generating about 0.0 per unit of volatility. If you would invest 5,040 in Gold Rain Enterprises on September 25, 2024 and sell it today you would lose (20.00) from holding Gold Rain Enterprises or give up 0.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Wah Hong Industrial vs. Gold Rain Enterprises
Performance |
Timeline |
Wah Hong Industrial |
Gold Rain Enterprises |
Wah Hong and Gold Rain Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wah Hong and Gold Rain
The main advantage of trading using opposite Wah Hong and Gold Rain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Hong position performs unexpectedly, Gold Rain 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 Gold Rain will offset losses from the drop in Gold Rain's long position.Wah Hong vs. Advantech Co | Wah Hong vs. IEI Integration Corp | Wah Hong vs. Flytech Technology Co | Wah Hong vs. Ennoconn Corp |
Gold Rain vs. Shin Kong Financial | Gold Rain vs. Yuanta Financial Holdings | Gold Rain vs. APEX International Financial | Gold Rain vs. Mega Financial Holding |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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