Correlation Between Wiwynn Corp and Lian Hwa
Can any of the company-specific risk be diversified away by investing in both Wiwynn Corp and Lian Hwa 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 Wiwynn Corp and Lian Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wiwynn Corp and Lian Hwa Foods, you can compare the effects of market volatilities on Wiwynn Corp and Lian Hwa 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 Wiwynn Corp with a short position of Lian Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wiwynn Corp and Lian Hwa.
Diversification Opportunities for Wiwynn Corp and Lian Hwa
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wiwynn and Lian is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Wiwynn Corp and Lian Hwa Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lian Hwa Foods and Wiwynn Corp 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 Wiwynn Corp are associated (or correlated) with Lian Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lian Hwa Foods has no effect on the direction of Wiwynn Corp i.e., Wiwynn Corp and Lian Hwa go up and down completely randomly.
Pair Corralation between Wiwynn Corp and Lian Hwa
Assuming the 90 days trading horizon Wiwynn Corp is expected to generate 2.21 times more return on investment than Lian Hwa. However, Wiwynn Corp is 2.21 times more volatile than Lian Hwa Foods. It trades about 0.21 of its potential returns per unit of risk. Lian Hwa Foods is currently generating about 0.19 per unit of risk. If you would invest 177,500 in Wiwynn Corp on September 23, 2024 and sell it today you would earn a total of 86,500 from holding Wiwynn Corp or generate 48.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Wiwynn Corp vs. Lian Hwa Foods
Performance |
Timeline |
Wiwynn Corp |
Lian Hwa Foods |
Wiwynn Corp and Lian Hwa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wiwynn Corp and Lian Hwa
The main advantage of trading using opposite Wiwynn Corp and Lian Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wiwynn Corp position performs unexpectedly, Lian Hwa 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 Lian Hwa will offset losses from the drop in Lian Hwa's long position.Wiwynn Corp vs. Aspeed Technology | Wiwynn Corp vs. Unimicron Technology Corp | Wiwynn Corp vs. Asmedia Technology | Wiwynn Corp vs. Novatek Microelectronics Corp |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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