Correlation Between SS TECH and Worldex Industry
Can any of the company-specific risk be diversified away by investing in both SS TECH and Worldex Industry 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 SS TECH and Worldex Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Worldex Industry Trading, you can compare the effects of market volatilities on SS TECH and Worldex Industry 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 SS TECH with a short position of Worldex Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Worldex Industry.
Diversification Opportunities for SS TECH and Worldex Industry
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between 101490 and Worldex is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Worldex Industry Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldex Industry Trading and SS TECH 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 SS TECH are associated (or correlated) with Worldex Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldex Industry Trading has no effect on the direction of SS TECH i.e., SS TECH and Worldex Industry go up and down completely randomly.
Pair Corralation between SS TECH and Worldex Industry
Assuming the 90 days trading horizon SS TECH is expected to generate 1.37 times more return on investment than Worldex Industry. However, SS TECH is 1.37 times more volatile than Worldex Industry Trading. It trades about 0.23 of its potential returns per unit of risk. Worldex Industry Trading is currently generating about 0.04 per unit of risk. If you would invest 2,604,405 in SS TECH on October 16, 2024 and sell it today you would earn a total of 350,595 from holding SS TECH or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Worldex Industry Trading
Performance |
| Timeline |
| SS TECH |
| Worldex Industry Trading |
SS TECH and Worldex Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Worldex Industry
The main advantage of trading using opposite SS TECH and Worldex Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, Worldex Industry 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 Worldex Industry will offset losses from the drop in Worldex Industry's long position.The idea behind SS TECH and Worldex Industry Trading 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.| Worldex Industry vs. WONIK Materials CoLtd | Worldex Industry vs. SS TECH | Worldex Industry vs. TES Co | Worldex Industry vs. LEENO 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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