Correlation Between Grand Plastic and Wayi International
Can any of the company-specific risk be diversified away by investing in both Grand Plastic 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 Grand Plastic and Wayi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Plastic Technology and Wayi International Digital, you can compare the effects of market volatilities on Grand Plastic 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 Grand Plastic with a short position of Wayi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Plastic and Wayi International.
Diversification Opportunities for Grand Plastic and Wayi International
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grand and Wayi is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Grand Plastic Technology and Wayi International Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayi International and Grand Plastic 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 Grand Plastic Technology 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 Grand Plastic i.e., Grand Plastic and Wayi International go up and down completely randomly.
Pair Corralation between Grand Plastic and Wayi International
Assuming the 90 days trading horizon Grand Plastic Technology is expected to generate 0.97 times more return on investment than Wayi International. However, Grand Plastic Technology is 1.03 times less risky than Wayi International. It trades about 0.1 of its potential returns per unit of risk. Wayi International Digital is currently generating about 0.08 per unit of risk. If you would invest 58,276 in Grand Plastic Technology on September 12, 2024 and sell it today you would earn a total of 116,724 from holding Grand Plastic Technology or generate 200.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Plastic Technology vs. Wayi International Digital
Performance |
| Timeline |
| Grand Plastic Technology |
| Wayi International |
Grand Plastic and Wayi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Plastic and Wayi International
The main advantage of trading using opposite Grand Plastic and Wayi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Plastic 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.| Grand Plastic vs. Sino American Silicon Products | Grand Plastic vs. Elan Microelectronics Corp | Grand Plastic vs. Greatek Electronics | Grand Plastic vs. Ruentex Development Co |
| Wayi International vs. Ruentex Materials Co | Wayi International vs. Grand Plastic Technology | Wayi International vs. General Plastic Industrial | Wayi International vs. International Games System |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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