Correlation Between Hiwin Technologies and Inmax Holding

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

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

Diversification Opportunities for Hiwin Technologies and Inmax Holding

0.46

Correlation Coefficient

Hiwin Technologies  Inmax Holding

Very weak diversification

The 3 months correlation between Hiwin and Inmax is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hiwin Technologies Corp and Inmax Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inmax Holding and Hiwin Technologies 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 Hiwin Technologies Corp are associated (or correlated) with Inmax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inmax Holding has no effect on the direction of Hiwin Technologies i.e., Hiwin Technologies and Inmax Holding go up and down completely randomly.

Pair Corralation between Hiwin Technologies and Inmax Holding

Assuming the 90 days trading horizon Hiwin Technologies Corp is expected to generate 0.8 times more return on investment than Inmax Holding. However, Hiwin Technologies Corp is 1.25 times less risky than Inmax Holding. It trades about 0.07 of its potential returns per unit of risk. Inmax Holding Co is currently generating about 0.01 per unit of risk. If you would invest  22,250  in Hiwin Technologies Corp on October 3, 2024 and sell it today you would earn a total of  10,650  from holding Hiwin Technologies Corp or generate 47.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.62%
Values	Daily Returns

Hiwin Technologies Corp  vs.  Inmax Holding Co

Hiwin Technologies Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hiwin Technologies Corp are ranked lower than 19 (%) 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.

Inmax Holding

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inmax Holding Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Inmax Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hiwin Technologies and Inmax Holding

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

The idea behind Hiwin Technologies Corp and Inmax Holding 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.