Correlation Between Hiwin Technologies and General Interface

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

Diversification Opportunities for Hiwin Technologies and General Interface

-0.28

Correlation Coefficient

Hiwin Technologies  General Interface

Very good diversification

The 3 months correlation between Hiwin and General is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hiwin Technologies Corp and General Interface Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Interface 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 General Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Interface has no effect on the direction of Hiwin Technologies i.e., Hiwin Technologies and General Interface go up and down completely randomly.

Pair Corralation between Hiwin Technologies and General Interface

Assuming the 90 days trading horizon Hiwin Technologies Corp is expected to generate 1.54 times more return on investment than General Interface. However, Hiwin Technologies is 1.54 times more volatile than General Interface Solution. It trades about 0.11 of its potential returns per unit of risk. General Interface Solution is currently generating about -0.11 per unit of risk. If you would invest  20,050  in Hiwin Technologies Corp on September 5, 2024 and sell it today you would earn a total of  3,150  from holding Hiwin Technologies Corp or generate 15.71% 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.  General Interface Solution

Hiwin Technologies Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hiwin Technologies Corp are ranked lower than 8 (%) 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.

General Interface

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days General Interface Solution 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.

Pair Trading with Hiwin Technologies and General Interface

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

The idea behind Hiwin Technologies Corp and General Interface Solution 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.