Correlation Between Wan Hai and Rexon Industrial
Can any of the company-specific risk be diversified away by investing in both Wan Hai and Rexon Industrial 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 Wan Hai and Rexon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wan Hai Lines and Rexon Industrial Corp, you can compare the effects of market volatilities on Wan Hai and Rexon Industrial 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 Wan Hai with a short position of Rexon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wan Hai and Rexon Industrial.
Diversification Opportunities for Wan Hai and Rexon Industrial
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wan and Rexon is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Wan Hai Lines and Rexon Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rexon Industrial Corp and Wan Hai 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 Wan Hai Lines are associated (or correlated) with Rexon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rexon Industrial Corp has no effect on the direction of Wan Hai i.e., Wan Hai and Rexon Industrial go up and down completely randomly.
Pair Corralation between Wan Hai and Rexon Industrial
Assuming the 90 days trading horizon Wan Hai Lines is expected to under-perform the Rexon Industrial. In addition to that, Wan Hai is 1.26 times more volatile than Rexon Industrial Corp. It trades about -0.23 of its total potential returns per unit of risk. Rexon Industrial Corp is currently generating about -0.21 per unit of volatility. If you would invest 3,250 in Rexon Industrial Corp on September 13, 2024 and sell it today you would lose (250.00) from holding Rexon Industrial Corp or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wan Hai Lines vs. Rexon Industrial Corp
Performance |
| Timeline |
| Wan Hai Lines |
| Rexon Industrial Corp |
Wan Hai and Rexon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wan Hai and Rexon Industrial
The main advantage of trading using opposite Wan Hai and Rexon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wan Hai position performs unexpectedly, Rexon Industrial 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 Rexon Industrial will offset losses from the drop in Rexon Industrial's long position.| Wan Hai vs. Yang Ming Marine | Wan Hai vs. Evergreen Marine Corp | Wan Hai vs. Eva Airways Corp | Wan Hai vs. China Airlines |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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