Correlation Between Wiwynn Corp and Waffer Technology

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

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

Diversification Opportunities for Wiwynn Corp and Waffer Technology

-0.46

Correlation Coefficient

Wiwynn Corp  Waffer Technology

Very good diversification

The 3 months correlation between Wiwynn and Waffer is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Wiwynn Corp and Waffer Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waffer Technology Corp 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 Waffer Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waffer Technology Corp has no effect on the direction of Wiwynn Corp i.e., Wiwynn Corp and Waffer Technology go up and down completely randomly.

Pair Corralation between Wiwynn Corp and Waffer Technology

Assuming the 90 days trading horizon Wiwynn Corp is expected to generate 1.12 times more return on investment than Waffer Technology. However, Wiwynn Corp is 1.12 times more volatile than Waffer Technology Corp. It trades about 0.23 of its potential returns per unit of risk. Waffer Technology Corp is currently generating about -0.02 per unit of risk. If you would invest  171,500  in Wiwynn Corp on September 30, 2024 and sell it today you would earn a total of  88,000  from holding Wiwynn Corp or generate 51.31% return on investment over 90 days.

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

Wiwynn Corp  vs.  Waffer Technology Corp

Wiwynn Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wiwynn Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Wiwynn Corp showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Wiwynn Corp and Waffer Technology

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

The idea behind Wiwynn Corp and Waffer Technology Corp 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.