Correlation Between Waffer Technology and Nan Ya

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

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

Diversification Opportunities for Waffer Technology and Nan Ya

0.34

Correlation Coefficient

Waffer Technology  Nan Ya

Weak diversification

The 3 months correlation between Waffer and Nan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Waffer Technology Corp and Nan Ya Printed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Ya Printed and Waffer 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 Waffer Technology Corp are associated (or correlated) with Nan Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Ya Printed has no effect on the direction of Waffer Technology i.e., Waffer Technology and Nan Ya go up and down completely randomly.

Pair Corralation between Waffer Technology and Nan Ya

Assuming the 90 days trading horizon Waffer Technology Corp is expected to generate 1.16 times more return on investment than Nan Ya. However, Waffer Technology is 1.16 times more volatile than Nan Ya Printed. It trades about -0.02 of its potential returns per unit of risk. Nan Ya Printed is currently generating about -0.08 per unit of risk. If you would invest  7,310  in Waffer Technology Corp on September 30, 2024 and sell it today you would lose (410.00) from holding Waffer Technology Corp or give up 5.61% of portfolio value over 90 days.

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

Waffer Technology Corp  vs.  Nan Ya Printed

Waffer Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nan Ya Printed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nan Ya Printed 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 Waffer Technology and Nan Ya

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

The idea behind Waffer Technology Corp and Nan Ya Printed 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.