Correlation Between Wan Hai and I Sheng
Can any of the company-specific risk be diversified away by investing in both Wan Hai and I Sheng 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 I Sheng 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 I Sheng Electric Wire, you can compare the effects of market volatilities on Wan Hai and I Sheng 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 I Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wan Hai and I Sheng.
Diversification Opportunities for Wan Hai and I Sheng
Poor diversification
The 3 months correlation between Wan and 6115 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wan Hai Lines and I Sheng Electric Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Sheng Electric 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 I Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Sheng Electric has no effect on the direction of Wan Hai i.e., Wan Hai and I Sheng go up and down completely randomly.
Pair Corralation between Wan Hai and I Sheng
Assuming the 90 days trading horizon Wan Hai Lines is expected to generate 5.94 times more return on investment than I Sheng. However, Wan Hai is 5.94 times more volatile than I Sheng Electric Wire. It trades about 0.02 of its potential returns per unit of risk. I Sheng Electric Wire is currently generating about -0.03 per unit of risk. If you would invest 8,200 in Wan Hai Lines on September 13, 2024 and sell it today you would earn a total of 90.00 from holding Wan Hai Lines or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wan Hai Lines vs. I Sheng Electric Wire
Performance |
| Timeline |
| Wan Hai Lines |
| I Sheng Electric |
Wan Hai and I Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wan Hai and I Sheng
The main advantage of trading using opposite Wan Hai and I Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wan Hai position performs unexpectedly, I Sheng 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 I Sheng will offset losses from the drop in I Sheng's long position.| Wan Hai vs. Yang Ming Marine | Wan Hai vs. U Ming Marine Transport | Wan Hai vs. Taiwan Navigation Co | Wan Hai vs. China Airlines |
| I Sheng vs. Yang Ming Marine | I Sheng vs. Wan Hai Lines | I Sheng vs. U Ming Marine Transport | I Sheng vs. Taiwan Navigation Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |