Correlation Between Wisher Industrial and Nien Hsing
Can any of the company-specific risk be diversified away by investing in both Wisher Industrial and Nien Hsing 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 Wisher Industrial and Nien Hsing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wisher Industrial Co and Nien Hsing Textile, you can compare the effects of market volatilities on Wisher Industrial and Nien Hsing 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 Wisher Industrial with a short position of Nien Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisher Industrial and Nien Hsing.
Diversification Opportunities for Wisher Industrial and Nien Hsing
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wisher and Nien is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wisher Industrial Co and Nien Hsing Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nien Hsing Textile and Wisher Industrial 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 Wisher Industrial Co are associated (or correlated) with Nien Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nien Hsing Textile has no effect on the direction of Wisher Industrial i.e., Wisher Industrial and Nien Hsing go up and down completely randomly.
Pair Corralation between Wisher Industrial and Nien Hsing
Assuming the 90 days trading horizon Wisher Industrial Co is expected to under-perform the Nien Hsing. In addition to that, Wisher Industrial is 1.25 times more volatile than Nien Hsing Textile. It trades about -0.16 of its total potential returns per unit of risk. Nien Hsing Textile is currently generating about 0.26 per unit of volatility. If you would invest 1,995 in Nien Hsing Textile on August 29, 2024 and sell it today you would earn a total of 95.00 from holding Nien Hsing Textile or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wisher Industrial Co vs. Nien Hsing Textile
Performance |
| Timeline |
| Wisher Industrial |
| Nien Hsing Textile |
Wisher Industrial and Nien Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wisher Industrial and Nien Hsing
The main advantage of trading using opposite Wisher Industrial and Nien Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisher Industrial position performs unexpectedly, Nien Hsing 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 Nien Hsing will offset losses from the drop in Nien Hsing's long position.| Wisher Industrial vs. Yulon Finance Corp | Wisher Industrial vs. Taiwan Secom Co | Wisher Industrial vs. Pou Chen Corp | Wisher Industrial vs. Great Wall Enterprise |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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