Correlation Between Hiwin Technologies and Strong H

Can any of the company-specific risk be diversified away by investing in both Hiwin Technologies and Strong H 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 Strong H 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 Strong H Machinery, you can compare the effects of market volatilities on Hiwin Technologies and Strong H 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 Strong H. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hiwin Technologies and Strong H.

Diversification Opportunities for Hiwin Technologies and Strong H

-0.34

Correlation Coefficient

Hiwin Technologies  Strong H

Very good diversification

The 3 months correlation between Hiwin and Strong is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hiwin Technologies Corp and Strong H Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strong H Machinery 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 Strong H. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strong H Machinery has no effect on the direction of Hiwin Technologies i.e., Hiwin Technologies and Strong H go up and down completely randomly.

Pair Corralation between Hiwin Technologies and Strong H

Assuming the 90 days trading horizon Hiwin Technologies Corp is expected to under-perform the Strong H. In addition to that, Hiwin Technologies is 3.06 times more volatile than Strong H Machinery. It trades about -0.1 of its total potential returns per unit of risk. Strong H Machinery is currently generating about 0.03 per unit of volatility. If you would invest  3,550  in Strong H Machinery on December 29, 2024 and sell it today you would earn a total of  50.00  from holding Strong H Machinery or generate 1.41% return on investment over 90 days.

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

Hiwin Technologies Corp  vs.  Strong H Machinery

Hiwin Technologies Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hiwin Technologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Strong H Machinery

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Strong H Machinery are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Strong H 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 Hiwin Technologies and Strong H

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

The idea behind Hiwin Technologies Corp and Strong H Machinery 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .