Correlation Between Excelsior Medical and WINSON Machinery
Can any of the company-specific risk be diversified away by investing in both Excelsior Medical and WINSON Machinery 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 Excelsior Medical and WINSON Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelsior Medical Co and WINSON Machinery Co, you can compare the effects of market volatilities on Excelsior Medical and WINSON Machinery 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 Excelsior Medical with a short position of WINSON Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Medical and WINSON Machinery.
Diversification Opportunities for Excelsior Medical and WINSON Machinery
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Excelsior and WINSON is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Medical Co and WINSON Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINSON Machinery and Excelsior Medical 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 Excelsior Medical Co are associated (or correlated) with WINSON Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINSON Machinery has no effect on the direction of Excelsior Medical i.e., Excelsior Medical and WINSON Machinery go up and down completely randomly.
Pair Corralation between Excelsior Medical and WINSON Machinery
Assuming the 90 days trading horizon Excelsior Medical Co is expected to generate 0.26 times more return on investment than WINSON Machinery. However, Excelsior Medical Co is 3.77 times less risky than WINSON Machinery. It trades about -0.05 of its potential returns per unit of risk. WINSON Machinery Co is currently generating about -0.05 per unit of risk. If you would invest 8,770 in Excelsior Medical Co on August 28, 2024 and sell it today you would lose (30.00) from holding Excelsior Medical Co or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excelsior Medical Co vs. WINSON Machinery Co
Performance |
| Timeline |
| Excelsior Medical |
| WINSON Machinery |
Excelsior Medical and WINSON Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelsior Medical and WINSON Machinery
The main advantage of trading using opposite Excelsior Medical and WINSON Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Medical position performs unexpectedly, WINSON Machinery 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 WINSON Machinery will offset losses from the drop in WINSON Machinery's long position.The idea behind Excelsior Medical Co and WINSON Machinery Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| WINSON Machinery vs. Cheng Shin Rubber | WINSON Machinery vs. China Steel Chemical | WINSON Machinery vs. Yulon Motor 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |