Correlation Between Shih Wei and Wisdom Marine
Can any of the company-specific risk be diversified away by investing in both Shih Wei and Wisdom Marine 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 Shih Wei and Wisdom Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shih Wei Navigation and Wisdom Marine Lines, you can compare the effects of market volatilities on Shih Wei and Wisdom Marine 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 Shih Wei with a short position of Wisdom Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shih Wei and Wisdom Marine.
Diversification Opportunities for Shih Wei and Wisdom Marine
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shih and Wisdom is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Shih Wei Navigation and Wisdom Marine Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisdom Marine Lines and Shih Wei 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 Shih Wei Navigation are associated (or correlated) with Wisdom Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisdom Marine Lines has no effect on the direction of Shih Wei i.e., Shih Wei and Wisdom Marine go up and down completely randomly.
Pair Corralation between Shih Wei and Wisdom Marine
Assuming the 90 days trading horizon Shih Wei Navigation is expected to under-perform the Wisdom Marine. But the stock apears to be less risky and, when comparing its historical volatility, Shih Wei Navigation is 1.41 times less risky than Wisdom Marine. The stock trades about -0.16 of its potential returns per unit of risk. The Wisdom Marine Lines is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6,360 in Wisdom Marine Lines on October 24, 2024 and sell it today you would lose (30.00) from holding Wisdom Marine Lines or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shih Wei Navigation vs. Wisdom Marine Lines
Performance |
| Timeline |
| Shih Wei Navigation |
| Wisdom Marine Lines |
Shih Wei and Wisdom Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shih Wei and Wisdom Marine
The main advantage of trading using opposite Shih Wei and Wisdom Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shih Wei position performs unexpectedly, Wisdom Marine 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 Wisdom Marine will offset losses from the drop in Wisdom Marine's long position.| Shih Wei vs. Sincere Navigation Corp | Shih Wei vs. U Ming Marine Transport | Shih Wei vs. Taiwan Navigation Co | Shih Wei vs. Wan Hai Lines |
| Wisdom Marine vs. U Ming Marine Transport | Wisdom Marine vs. Wan Hai Lines | Wisdom Marine vs. Yang Ming Marine | Wisdom Marine vs. Shih Wei Navigation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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