Correlation Between Finetechnix CoLtd and Wing Yip
Can any of the company-specific risk be diversified away by investing in both Finetechnix CoLtd and Wing Yip 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 Finetechnix CoLtd and Wing Yip into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finetechnix CoLtd and Wing Yip Food, you can compare the effects of market volatilities on Finetechnix CoLtd and Wing Yip 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 Finetechnix CoLtd with a short position of Wing Yip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finetechnix CoLtd and Wing Yip.
Diversification Opportunities for Finetechnix CoLtd and Wing Yip
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finetechnix and Wing is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Finetechnix CoLtd and Wing Yip Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wing Yip Food and Finetechnix CoLtd 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 Finetechnix CoLtd are associated (or correlated) with Wing Yip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wing Yip Food has no effect on the direction of Finetechnix CoLtd i.e., Finetechnix CoLtd and Wing Yip go up and down completely randomly.
Pair Corralation between Finetechnix CoLtd and Wing Yip
Assuming the 90 days trading horizon Finetechnix CoLtd is expected to under-perform the Wing Yip. But the stock apears to be less risky and, when comparing its historical volatility, Finetechnix CoLtd is 6.35 times less risky than Wing Yip. The stock trades about -0.42 of its potential returns per unit of risk. The Wing Yip Food is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 199,900 in Wing Yip Food on September 3, 2024 and sell it today you would earn a total of 11,100 from holding Wing Yip Food or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finetechnix CoLtd vs. Wing Yip Food
Performance |
| Timeline |
| Finetechnix CoLtd |
| Wing Yip Food |
Finetechnix CoLtd and Wing Yip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finetechnix CoLtd and Wing Yip
The main advantage of trading using opposite Finetechnix CoLtd and Wing Yip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finetechnix CoLtd position performs unexpectedly, Wing Yip 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 Wing Yip will offset losses from the drop in Wing Yip's long position.| Finetechnix CoLtd vs. TOPMATERIAL LTD | Finetechnix CoLtd vs. Union Materials Corp | Finetechnix CoLtd vs. Miwon Chemicals Co | Finetechnix CoLtd vs. SK Chemicals Co |
| Wing Yip vs. Maeil Dairies Co | Wing Yip vs. HYUNDAI FEED | Wing Yip vs. Neo Cremar Co | Wing Yip vs. Dongwoo Farm To |
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.
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