Correlation Between Holitech Technology and Sunwoda Electronic

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Can any of the company-specific risk be diversified away by investing in both Holitech Technology and Sunwoda Electronic 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 Holitech Technology and Sunwoda Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holitech Technology Co and Sunwoda Electronic, you can compare the effects of market volatilities on Holitech Technology and Sunwoda Electronic 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 Holitech Technology with a short position of Sunwoda Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and Sunwoda Electronic.

Diversification Opportunities for Holitech Technology and Sunwoda Electronic

HolitechSunwodaDiversified AwayHolitechSunwodaDiversified Away100%
0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Holitech and Sunwoda is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and Sunwoda Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunwoda Electronic and Holitech Technology 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 Holitech Technology Co are associated (or correlated) with Sunwoda Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunwoda Electronic has no effect on the direction of Holitech Technology i.e., Holitech Technology and Sunwoda Electronic go up and down completely randomly.

Pair Corralation between Holitech Technology and Sunwoda Electronic

Assuming the 90 days trading horizon Holitech Technology Co is expected to generate 0.84 times more return on investment than Sunwoda Electronic. However, Holitech Technology Co is 1.19 times less risky than Sunwoda Electronic. It trades about 0.34 of its potential returns per unit of risk. Sunwoda Electronic is currently generating about 0.04 per unit of risk. If you would invest  136.00  in Holitech Technology Co on September 28, 2024 and sell it today you would earn a total of  128.00  from holding Holitech Technology Co or generate 94.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Holitech Technology Co  vs.  Sunwoda Electronic

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 020406080100
JavaScript chart by amCharts 3.21.15002217 300207
       Timeline  
Holitech Technology 

Risk-Adjusted Performance

26 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Holitech Technology Co are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Holitech Technology sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.41.61.822.22.42.62.8
Sunwoda Electronic 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Sunwoda Electronic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sunwoda Electronic may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1820222426

Holitech Technology and Sunwoda Electronic Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.96-7.46-4.96-2.460.02.855.88.7511.714.64 0.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15002217 300207
       Returns  

Pair Trading with Holitech Technology and Sunwoda Electronic

The main advantage of trading using opposite Holitech Technology and Sunwoda Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holitech Technology position performs unexpectedly, Sunwoda Electronic 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 Sunwoda Electronic will offset losses from the drop in Sunwoda Electronic's long position.
The idea behind Holitech Technology Co and Sunwoda Electronic 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.
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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