Correlation Between WINSON Machinery and Unique Optical
Can any of the company-specific risk be diversified away by investing in both WINSON Machinery and Unique Optical 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 WINSON Machinery and Unique Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WINSON Machinery Co and Unique Optical Industrial, you can compare the effects of market volatilities on WINSON Machinery and Unique Optical 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 WINSON Machinery with a short position of Unique Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of WINSON Machinery and Unique Optical.
Diversification Opportunities for WINSON Machinery and Unique Optical
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between WINSON and Unique is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding WINSON Machinery Co and Unique Optical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unique Optical Industrial and WINSON Machinery 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 WINSON Machinery Co are associated (or correlated) with Unique Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unique Optical Industrial has no effect on the direction of WINSON Machinery i.e., WINSON Machinery and Unique Optical go up and down completely randomly.
Pair Corralation between WINSON Machinery and Unique Optical
Assuming the 90 days trading horizon WINSON Machinery Co is expected to generate 1.68 times more return on investment than Unique Optical. However, WINSON Machinery is 1.68 times more volatile than Unique Optical Industrial. It trades about 0.05 of its potential returns per unit of risk. Unique Optical Industrial is currently generating about -0.24 per unit of risk. If you would invest 1,995 in WINSON Machinery Co on September 5, 2024 and sell it today you would earn a total of 50.00 from holding WINSON Machinery Co or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
WINSON Machinery Co vs. Unique Optical Industrial
Performance |
| Timeline |
| WINSON Machinery |
| Unique Optical Industrial |
WINSON Machinery and Unique Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WINSON Machinery and Unique Optical
The main advantage of trading using opposite WINSON Machinery and Unique Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WINSON Machinery position performs unexpectedly, Unique Optical 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 Unique Optical will offset losses from the drop in Unique Optical's long position.| WINSON Machinery vs. Unique Optical Industrial | WINSON Machinery vs. Shuang Bang Industrial | WINSON Machinery vs. Baotek Industrial Materials | WINSON Machinery vs. Wha Yu Industrial |
| Unique Optical vs. Hon Hai Precision | Unique Optical vs. Delta Electronics | Unique Optical vs. LARGAN Precision Co | Unique Optical vs. AU Optronics |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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