Correlation Between Wisher Industrial and Taisun Enterprise

Can any of the company-specific risk be diversified away by investing in both Wisher Industrial and Taisun Enterprise 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 Wisher Industrial and Taisun Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wisher Industrial Co and Taisun Enterprise Co, you can compare the effects of market volatilities on Wisher Industrial and Taisun Enterprise 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 Wisher Industrial with a short position of Taisun Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisher Industrial and Taisun Enterprise.

Diversification Opportunities for Wisher Industrial and Taisun Enterprise

-0.01

Correlation Coefficient

Wisher Industrial  Taisun Enterprise

Good diversification

The 3 months correlation between Wisher and Taisun is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Wisher Industrial Co and Taisun Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taisun Enterprise and Wisher Industrial 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 Wisher Industrial Co are associated (or correlated) with Taisun Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taisun Enterprise has no effect on the direction of Wisher Industrial i.e., Wisher Industrial and Taisun Enterprise go up and down completely randomly.

Pair Corralation between Wisher Industrial and Taisun Enterprise

Assuming the 90 days trading horizon Wisher Industrial Co is expected to generate 1.31 times more return on investment than Taisun Enterprise. However, Wisher Industrial is 1.31 times more volatile than Taisun Enterprise Co. It trades about -0.26 of its potential returns per unit of risk. Taisun Enterprise Co is currently generating about -0.45 per unit of risk. If you would invest  1,490  in Wisher Industrial Co on October 1, 2024 and sell it today you would lose (60.00) from holding Wisher Industrial Co or give up 4.03% of portfolio value over 90 days.

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

Wisher Industrial Co  vs.  Taisun Enterprise Co

Wisher Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wisher Industrial 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.

Taisun Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taisun Enterprise Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Taisun Enterprise 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 Wisher Industrial and Taisun Enterprise

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

The idea behind Wisher Industrial Co and Taisun Enterprise Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.