Correlation Between I Sheng and Creative Sensor
Can any of the company-specific risk be diversified away by investing in both I Sheng and Creative Sensor 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 Creative Sensor 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 Creative Sensor, you can compare the effects of market volatilities on I Sheng and Creative Sensor 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 Creative Sensor. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Sheng and Creative Sensor.
Diversification Opportunities for I Sheng and Creative Sensor
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 6115 and Creative is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding I Sheng Electric Wire and Creative Sensor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Sensor 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 Creative Sensor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Sensor has no effect on the direction of I Sheng i.e., I Sheng and Creative Sensor go up and down completely randomly.
Pair Corralation between I Sheng and Creative Sensor
Assuming the 90 days trading horizon I Sheng Electric Wire is expected to generate 0.21 times more return on investment than Creative Sensor. However, I Sheng Electric Wire is 4.68 times less risky than Creative Sensor. It trades about -0.09 of its potential returns per unit of risk. Creative Sensor is currently generating about -0.51 per unit of risk. If you would invest 5,150 in I Sheng Electric Wire on November 3, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Sheng Electric Wire vs. Creative Sensor
Performance |
| Timeline |
| I Sheng Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Creative Sensor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
I Sheng and Creative Sensor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Sheng and Creative Sensor
The main advantage of trading using opposite I Sheng and Creative Sensor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Sheng position performs unexpectedly, Creative Sensor 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 Creative Sensor will offset losses from the drop in Creative Sensor's long position.The idea behind I Sheng Electric Wire and Creative Sensor 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |