Correlation Between Wah Hong and Cipherlab
Can any of the company-specific risk be diversified away by investing in both Wah Hong and Cipherlab 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 Cipherlab 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 Cipherlab Co, you can compare the effects of market volatilities on Wah Hong and Cipherlab 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 Cipherlab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Hong and Cipherlab.
Diversification Opportunities for Wah Hong and Cipherlab
Good diversification
The 3 months correlation between Wah and Cipherlab is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Wah Hong Industrial and Cipherlab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipherlab 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 Cipherlab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipherlab has no effect on the direction of Wah Hong i.e., Wah Hong and Cipherlab go up and down completely randomly.
Pair Corralation between Wah Hong and Cipherlab
Assuming the 90 days trading horizon Wah Hong Industrial is expected to generate 1.14 times more return on investment than Cipherlab. However, Wah Hong is 1.14 times more volatile than Cipherlab Co. It trades about 0.06 of its potential returns per unit of risk. Cipherlab Co is currently generating about -0.04 per unit of risk. If you would invest 3,530 in Wah Hong Industrial on September 25, 2024 and sell it today you would earn a total of 770.00 from holding Wah Hong Industrial or generate 21.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.21% |
Values | Daily Returns |
Wah Hong Industrial vs. Cipherlab Co
Performance |
Timeline |
Wah Hong Industrial |
Cipherlab |
Wah Hong and Cipherlab Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wah Hong and Cipherlab
The main advantage of trading using opposite Wah Hong and Cipherlab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Hong position performs unexpectedly, Cipherlab 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 Cipherlab will offset losses from the drop in Cipherlab'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 |
Cipherlab vs. Castles Technology Co | Cipherlab vs. Gold Rain Enterprises | Cipherlab vs. Accton Technology Corp | Cipherlab vs. Wah Hong Industrial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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