Correlation Between DingZing Advanced and An Shin
Can any of the company-specific risk be diversified away by investing in both DingZing Advanced and An Shin 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 DingZing Advanced and An Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DingZing Advanced Materials and An Shin Food Services, you can compare the effects of market volatilities on DingZing Advanced and An Shin 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 DingZing Advanced with a short position of An Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of DingZing Advanced and An Shin.
Diversification Opportunities for DingZing Advanced and An Shin
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DingZing and 1259 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding DingZing Advanced Materials and An Shin Food Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Shin Food and DingZing Advanced 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 DingZing Advanced Materials are associated (or correlated) with An Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Shin Food has no effect on the direction of DingZing Advanced i.e., DingZing Advanced and An Shin go up and down completely randomly.
Pair Corralation between DingZing Advanced and An Shin
Assuming the 90 days trading horizon DingZing Advanced Materials is expected to generate 2.99 times more return on investment than An Shin. However, DingZing Advanced is 2.99 times more volatile than An Shin Food Services. It trades about 0.17 of its potential returns per unit of risk. An Shin Food Services is currently generating about -0.12 per unit of risk. If you would invest 15,150 in DingZing Advanced Materials on November 5, 2024 and sell it today you would earn a total of 850.00 from holding DingZing Advanced Materials or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DingZing Advanced Materials vs. An Shin Food Services
Performance |
| Timeline |
| DingZing Advanced |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| An Shin Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DingZing Advanced and An Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DingZing Advanced and An Shin
The main advantage of trading using opposite DingZing Advanced and An Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DingZing Advanced position performs unexpectedly, An Shin 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 An Shin will offset losses from the drop in An Shin's long position.The idea behind DingZing Advanced Materials and An Shin Food Services 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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