Correlation Between Integrated Electronic and Weihai Honglin
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By analyzing existing cross correlation between Integrated Electronic Systems and Weihai Honglin Electronic, you can compare the effects of market volatilities on Integrated Electronic and Weihai Honglin 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 Integrated Electronic with a short position of Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Electronic and Weihai Honglin.
Diversification Opportunities for Integrated Electronic and Weihai Honglin
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Integrated and Weihai is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Electronic Systems and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic and Integrated Electronic 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 Integrated Electronic Systems are associated (or correlated) with Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Integrated Electronic i.e., Integrated Electronic and Weihai Honglin go up and down completely randomly.
Pair Corralation between Integrated Electronic and Weihai Honglin
Assuming the 90 days trading horizon Integrated Electronic Systems is expected to generate 1.1 times more return on investment than Weihai Honglin. However, Integrated Electronic is 1.1 times more volatile than Weihai Honglin Electronic. It trades about 0.02 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about -0.03 per unit of risk. If you would invest 686.00 in Integrated Electronic Systems on September 4, 2024 and sell it today you would earn a total of 101.00 from holding Integrated Electronic Systems or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 87.21% |
| Values | Daily Returns |
Integrated Electronic Systems vs. Weihai Honglin Electronic
Performance |
| Timeline |
| Integrated Electronic |
| Weihai Honglin Electronic |
Integrated Electronic and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Electronic and Weihai Honglin
The main advantage of trading using opposite Integrated Electronic and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Electronic position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.The idea behind Integrated Electronic Systems and Weihai Honglin Electronic 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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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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