Correlation Between Integrated Electronic and Suzhou Xingye

Can any of the company-specific risk be diversified away by investing in both Integrated Electronic and Suzhou Xingye 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 Integrated Electronic and Suzhou Xingye into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integrated Electronic Systems and Suzhou Xingye Material, you can compare the effects of market volatilities on Integrated Electronic and Suzhou Xingye 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 Integrated Electronic with a short position of Suzhou Xingye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Electronic and Suzhou Xingye.

Diversification Opportunities for Integrated Electronic and Suzhou Xingye

0.63

Correlation Coefficient

Integrated Electronic  Suzhou Xingye

Poor diversification

The 3 months correlation between Integrated and Suzhou is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Electronic Systems and Suzhou Xingye Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Xingye Material and Integrated Electronic 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 Integrated Electronic Systems are associated (or correlated) with Suzhou Xingye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Xingye Material has no effect on the direction of Integrated Electronic i.e., Integrated Electronic and Suzhou Xingye go up and down completely randomly.

Pair Corralation between Integrated Electronic and Suzhou Xingye

Assuming the 90 days trading horizon Integrated Electronic Systems is expected to generate 1.03 times more return on investment than Suzhou Xingye. However, Integrated Electronic is 1.03 times more volatile than Suzhou Xingye Material. It trades about 0.01 of its potential returns per unit of risk. Suzhou Xingye Material is currently generating about -0.03 per unit of risk. If you would invest  710.00  in Integrated Electronic Systems on October 9, 2024 and sell it today you would lose (69.00) from holding Integrated Electronic Systems or give up 9.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Integrated Electronic Systems  vs.  Suzhou Xingye Material

Integrated Electronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Electronic Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Integrated Electronic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Suzhou Xingye Material

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Suzhou Xingye Material are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Suzhou Xingye is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Integrated Electronic and Suzhou Xingye

The main advantage of trading using opposite Integrated Electronic and Suzhou Xingye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Electronic position performs unexpectedly, Suzhou Xingye 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 Suzhou Xingye will offset losses from the drop in Suzhou Xingye's long position.

The idea behind Integrated Electronic Systems and Suzhou Xingye Material 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.