Correlation Between SuperAlloy Industrial and Wha Yu

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

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

Diversification Opportunities for SuperAlloy Industrial and Wha Yu

0.33

Correlation Coefficient

SuperAlloy Industrial  Wha Yu

Weak diversification

The 3 months correlation between SuperAlloy and Wha is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SuperAlloy Industrial Co, and Wha Yu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wha Yu Industrial and SuperAlloy 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 SuperAlloy Industrial Co, are associated (or correlated) with Wha Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wha Yu Industrial has no effect on the direction of SuperAlloy Industrial i.e., SuperAlloy Industrial and Wha Yu go up and down completely randomly.

Pair Corralation between SuperAlloy Industrial and Wha Yu

Assuming the 90 days trading horizon SuperAlloy Industrial is expected to generate 2.21 times less return on investment than Wha Yu. In addition to that, SuperAlloy Industrial is 1.24 times more volatile than Wha Yu Industrial. It trades about 0.05 of its total potential returns per unit of risk. Wha Yu Industrial is currently generating about 0.13 per unit of volatility. If you would invest  1,815  in Wha Yu Industrial on October 9, 2024 and sell it today you would earn a total of  95.00  from holding Wha Yu Industrial or generate 5.23% return on investment over 90 days.

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

SuperAlloy Industrial Co,  vs.  Wha Yu Industrial

SuperAlloy Industrial Co,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SuperAlloy Industrial Co, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SuperAlloy Industrial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Wha Yu Industrial

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wha Yu Industrial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Wha Yu showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SuperAlloy Industrial and Wha Yu

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

The idea behind SuperAlloy Industrial Co, and Wha Yu Industrial 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.