Correlation Between Ocean Plastics and Hsin Yung

Can any of the company-specific risk be diversified away by investing in both Ocean Plastics and Hsin Yung 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 Ocean Plastics and Hsin Yung into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ocean Plastics Co and Hsin Yung Chien, you can compare the effects of market volatilities on Ocean Plastics and Hsin Yung 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 Ocean Plastics with a short position of Hsin Yung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Plastics and Hsin Yung.

Diversification Opportunities for Ocean Plastics and Hsin Yung

0.52

Correlation Coefficient

Ocean Plastics  Hsin Yung

Very weak diversification

The 3 months correlation between Ocean and Hsin is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Plastics Co and Hsin Yung Chien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsin Yung Chien and Ocean Plastics 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 Ocean Plastics Co are associated (or correlated) with Hsin Yung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsin Yung Chien has no effect on the direction of Ocean Plastics i.e., Ocean Plastics and Hsin Yung go up and down completely randomly.

Pair Corralation between Ocean Plastics and Hsin Yung

Assuming the 90 days trading horizon Ocean Plastics Co is expected to generate 1.52 times more return on investment than Hsin Yung. However, Ocean Plastics is 1.52 times more volatile than Hsin Yung Chien. It trades about 0.0 of its potential returns per unit of risk. Hsin Yung Chien is currently generating about 0.0 per unit of risk. If you would invest  3,320  in Ocean Plastics Co on October 3, 2024 and sell it today you would lose (50.00) from holding Ocean Plastics Co or give up 1.51% of portfolio value over 90 days.

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

Ocean Plastics Co  vs.  Hsin Yung Chien

Ocean Plastics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocean Plastics Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Hsin Yung Chien

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hsin Yung Chien has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hsin Yung is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ocean Plastics and Hsin Yung

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

The idea behind Ocean Plastics Co and Hsin Yung Chien 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.