Correlation Between Airtac International and Hiwin Technologies

Can any of the company-specific risk be diversified away by investing in both Airtac International and Hiwin Technologies 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 Airtac International and Hiwin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Airtac International Group and Hiwin Technologies Corp, you can compare the effects of market volatilities on Airtac International and Hiwin Technologies 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 Airtac International with a short position of Hiwin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airtac International and Hiwin Technologies.

Diversification Opportunities for Airtac International and Hiwin Technologies

0.31

Correlation Coefficient

Airtac International  Hiwin Technologies

Weak diversification

The 3 months correlation between Airtac and Hiwin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Airtac International Group and Hiwin Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiwin Technologies Corp and Airtac International 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 Airtac International Group are associated (or correlated) with Hiwin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiwin Technologies Corp has no effect on the direction of Airtac International i.e., Airtac International and Hiwin Technologies go up and down completely randomly.

Pair Corralation between Airtac International and Hiwin Technologies

Assuming the 90 days trading horizon Airtac International Group is expected to under-perform the Hiwin Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Airtac International Group is 1.2 times less risky than Hiwin Technologies. The stock trades about -0.05 of its potential returns per unit of risk. The Hiwin Technologies Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  23,100  in Hiwin Technologies Corp on September 15, 2024 and sell it today you would earn a total of  1,700  from holding Hiwin Technologies Corp or generate 7.36% return on investment over 90 days.

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

Airtac International Group  vs.  Hiwin Technologies Corp

Airtac International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Airtac International Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Airtac International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hiwin Technologies Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hiwin Technologies Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hiwin Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Airtac International and Hiwin Technologies

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

The idea behind Airtac International Group and Hiwin Technologies Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.