Correlation Between Holy Stone and Wha Yu
Can any of the company-specific risk be diversified away by investing in both Holy Stone and Wha Yu 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 Holy Stone and Wha Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holy Stone Enterprise and Wha Yu Industrial, you can compare the effects of market volatilities on Holy Stone and Wha Yu 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 Holy Stone with a short position of Wha Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holy Stone and Wha Yu.
Diversification Opportunities for Holy Stone and Wha Yu
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Holy and Wha is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Holy Stone Enterprise and Wha Yu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wha Yu Industrial and Holy Stone 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 Holy Stone Enterprise are associated (or correlated) with Wha Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wha Yu Industrial has no effect on the direction of Holy Stone i.e., Holy Stone and Wha Yu go up and down completely randomly.
Pair Corralation between Holy Stone and Wha Yu
Assuming the 90 days trading horizon Holy Stone Enterprise is expected to generate 0.21 times more return on investment than Wha Yu. However, Holy Stone Enterprise is 4.87 times less risky than Wha Yu. It trades about 0.09 of its potential returns per unit of risk. Wha Yu Industrial is currently generating about -0.02 per unit of risk. If you would invest 8,630 in Holy Stone Enterprise on October 25, 2024 and sell it today you would earn a total of 80.00 from holding Holy Stone Enterprise or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Holy Stone Enterprise vs. Wha Yu Industrial
Performance |
| Timeline |
| Holy Stone Enterprise |
| Wha Yu Industrial |
Holy Stone and Wha Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holy Stone and Wha Yu
The main advantage of trading using opposite Holy Stone and Wha Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holy Stone position performs unexpectedly, Wha Yu 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 Wha Yu will offset losses from the drop in Wha Yu's long position.| Holy Stone vs. Walsin Technology Corp | Holy Stone vs. Yageo Corp | Holy Stone vs. Tripod Technology Corp | Holy Stone vs. Asia Optical Co |
| Wha Yu vs. Gemtek Technology Co | Wha Yu vs. Arcadyan Technology Corp | Wha Yu vs. Zinwell | Wha Yu vs. Silitech Technology Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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