Correlation Between NewFlex Technology and CS BEARING

Can any of the company-specific risk be diversified away by investing in both NewFlex Technology and CS BEARING 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 NewFlex Technology and CS BEARING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NewFlex Technology Co and CS BEARING CoLtd, you can compare the effects of market volatilities on NewFlex Technology and CS BEARING 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 NewFlex Technology with a short position of CS BEARING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and CS BEARING.

Diversification Opportunities for NewFlex Technology and CS BEARING

0.89

Correlation Coefficient

NewFlex Technology  CS BEARING

Very poor diversification

The 3 months correlation between NewFlex and 297090 is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology Co and CS BEARING CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS BEARING CoLtd and NewFlex 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 NewFlex Technology Co are associated (or correlated) with CS BEARING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS BEARING CoLtd has no effect on the direction of NewFlex Technology i.e., NewFlex Technology and CS BEARING go up and down completely randomly.

Pair Corralation between NewFlex Technology and CS BEARING

Assuming the 90 days trading horizon NewFlex Technology is expected to generate 1.03 times less return on investment than CS BEARING. In addition to that, NewFlex Technology is 1.22 times more volatile than CS BEARING CoLtd. It trades about 0.44 of its total potential returns per unit of risk. CS BEARING CoLtd is currently generating about 0.56 per unit of volatility. If you would invest  366,000  in CS BEARING CoLtd on October 10, 2024 and sell it today you would earn a total of  182,000  from holding CS BEARING CoLtd or generate 49.73% return on investment over 90 days.

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

NewFlex Technology Co  vs.  CS BEARING CoLtd

NewFlex Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

CS BEARING CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with NewFlex Technology and CS BEARING

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

The idea behind NewFlex Technology Co and CS BEARING CoLtd 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.