Correlation Between I Sheng and In Win
Can any of the company-specific risk be diversified away by investing in both I Sheng and In Win 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 I Sheng and In Win into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Sheng Electric Wire and In Win Development, you can compare the effects of market volatilities on I Sheng and In Win 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 I Sheng with a short position of In Win. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Sheng and In Win.
Diversification Opportunities for I Sheng and In Win
Poor diversification
The 3 months correlation between 6115 and 6117 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding I Sheng Electric Wire and In Win Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In Win Development and I Sheng 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 I Sheng Electric Wire are associated (or correlated) with In Win. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In Win Development has no effect on the direction of I Sheng i.e., I Sheng and In Win go up and down completely randomly.
Pair Corralation between I Sheng and In Win
Assuming the 90 days trading horizon I Sheng Electric Wire is expected to generate 0.22 times more return on investment than In Win. However, I Sheng Electric Wire is 4.64 times less risky than In Win. It trades about -0.09 of its potential returns per unit of risk. In Win Development is currently generating about -0.16 per unit of risk. If you would invest 5,150 in I Sheng Electric Wire on November 2, 2024 and sell it today you would lose (40.00) from holding I Sheng Electric Wire or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Sheng Electric Wire vs. In Win Development
Performance |
| Timeline |
| I Sheng Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| In Win Development |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
I Sheng and In Win Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Sheng and In Win
The main advantage of trading using opposite I Sheng and In Win positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Sheng position performs unexpectedly, In Win 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 In Win will offset losses from the drop in In Win's long position.The idea behind I Sheng Electric Wire and In Win Development 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.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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