Correlation Between Shan Loong and Wayi International
Can any of the company-specific risk be diversified away by investing in both Shan Loong and Wayi International 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 Shan Loong and Wayi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shan Loong Transportation Co and Wayi International Digital, you can compare the effects of market volatilities on Shan Loong and Wayi International 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 Shan Loong with a short position of Wayi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shan Loong and Wayi International.
Diversification Opportunities for Shan Loong and Wayi International
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shan and Wayi is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shan Loong Transportation Co and Wayi International Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayi International and Shan Loong 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 Shan Loong Transportation Co are associated (or correlated) with Wayi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayi International has no effect on the direction of Shan Loong i.e., Shan Loong and Wayi International go up and down completely randomly.
Pair Corralation between Shan Loong and Wayi International
Assuming the 90 days trading horizon Shan Loong Transportation Co is expected to under-perform the Wayi International. But the stock apears to be less risky and, when comparing its historical volatility, Shan Loong Transportation Co is 3.52 times less risky than Wayi International. The stock trades about -0.17 of its potential returns per unit of risk. The Wayi International Digital is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 13,000 in Wayi International Digital on September 3, 2024 and sell it today you would earn a total of 3,050 from holding Wayi International Digital or generate 23.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shan Loong Transportation Co vs. Wayi International Digital
Performance |
| Timeline |
| Shan Loong Transport |
| Wayi International |
Shan Loong and Wayi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shan Loong and Wayi International
The main advantage of trading using opposite Shan Loong and Wayi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shan Loong position performs unexpectedly, Wayi International 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 Wayi International will offset losses from the drop in Wayi International's long position.| Shan Loong vs. Tainan Spinning Co | Shan Loong vs. Chia Her Industrial | Shan Loong vs. WiseChip Semiconductor | Shan Loong vs. Novatek Microelectronics Corp |
| Wayi International vs. Shan Loong Transportation Co | Wayi International vs. Daxin Materials Corp | Wayi International vs. Medigen Biotechnology | Wayi International vs. Eternal Materials 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |