Correlation Between Sheng Yu and Welldone
Can any of the company-specific risk be diversified away by investing in both Sheng Yu and Welldone 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 Sheng Yu and Welldone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sheng Yu Steel and Welldone Co, you can compare the effects of market volatilities on Sheng Yu and Welldone 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 Sheng Yu with a short position of Welldone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sheng Yu and Welldone.
Diversification Opportunities for Sheng Yu and Welldone
Very good diversification
The 3 months correlation between Sheng and Welldone is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sheng Yu Steel and Welldone Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welldone and Sheng Yu 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 Sheng Yu Steel are associated (or correlated) with Welldone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welldone has no effect on the direction of Sheng Yu i.e., Sheng Yu and Welldone go up and down completely randomly.
Pair Corralation between Sheng Yu and Welldone
Assuming the 90 days trading horizon Sheng Yu Steel is expected to generate 0.59 times more return on investment than Welldone. However, Sheng Yu Steel is 1.7 times less risky than Welldone. It trades about -0.08 of its potential returns per unit of risk. Welldone Co is currently generating about -0.07 per unit of risk. If you would invest 2,770 in Sheng Yu Steel on September 14, 2024 and sell it today you would lose (285.00) from holding Sheng Yu Steel or give up 10.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sheng Yu Steel vs. Welldone Co
Performance |
| Timeline |
| Sheng Yu Steel |
| Welldone |
Sheng Yu and Welldone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sheng Yu and Welldone
The main advantage of trading using opposite Sheng Yu and Welldone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sheng Yu position performs unexpectedly, Welldone 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 Welldone will offset losses from the drop in Welldone's long position.| Sheng Yu vs. Tainan Spinning Co | Sheng Yu vs. Lealea Enterprise Co | Sheng Yu vs. China Petrochemical Development | Sheng Yu vs. Ruentex Development Co |
| Welldone vs. Farglory FTZ Investment | Welldone vs. Ji Haw Industrial Co | Welldone vs. Sunny Friend Environmental | Welldone vs. Sheng Yu Steel |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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