Correlation Between Allied Industrial and Wha Yu
Can any of the company-specific risk be diversified away by investing in both Allied Industrial 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 Allied Industrial and Wha Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Industrial and Wha Yu Industrial, you can compare the effects of market volatilities on Allied Industrial 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 Allied Industrial with a short position of Wha Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Industrial and Wha Yu.
Diversification Opportunities for Allied Industrial and Wha Yu
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allied and Wha is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Allied Industrial 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 Allied Industrial 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 Allied Industrial 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 Allied Industrial i.e., Allied Industrial and Wha Yu go up and down completely randomly.
Pair Corralation between Allied Industrial and Wha Yu
Assuming the 90 days trading horizon Allied Industrial is expected to under-perform the Wha Yu. But the stock apears to be less risky and, when comparing its historical volatility, Allied Industrial is 1.27 times less risky than Wha Yu. The stock trades about -0.1 of its potential returns per unit of risk. The Wha Yu Industrial is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,815 in Wha Yu Industrial on November 30, 2024 and sell it today you would lose (25.00) from holding Wha Yu Industrial or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Industrial vs. Wha Yu Industrial
Performance |
| Timeline |
| Allied Industrial |
| Wha Yu Industrial |
Allied Industrial and Wha Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Industrial and Wha Yu
The main advantage of trading using opposite Allied Industrial and Wha Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Industrial 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.| Allied Industrial vs. Tong Hwa Synthetic Fiber | Allied Industrial vs. International Games System | Allied Industrial vs. Ching Feng Home | Allied Industrial vs. Chi Sheng Chemical |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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