Correlation Between Zinwell and Hanpin Electron

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

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

Diversification Opportunities for Zinwell and Hanpin Electron

-0.72

Correlation Coefficient

Zinwell  Hanpin Electron

Pay attention - limited upside

The 3 months correlation between Zinwell and Hanpin is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Zinwell and Hanpin Electron Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanpin Electron and Zinwell 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 Zinwell are associated (or correlated) with Hanpin Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanpin Electron has no effect on the direction of Zinwell i.e., Zinwell and Hanpin Electron go up and down completely randomly.

Pair Corralation between Zinwell and Hanpin Electron

Assuming the 90 days trading horizon Zinwell is expected to under-perform the Hanpin Electron. In addition to that, Zinwell is 1.2 times more volatile than Hanpin Electron Co. It trades about -0.29 of its total potential returns per unit of risk. Hanpin Electron Co is currently generating about -0.17 per unit of volatility. If you would invest  5,640  in Hanpin Electron Co on October 11, 2024 and sell it today you would lose (310.00) from holding Hanpin Electron Co or give up 5.5% of portfolio value over 90 days.

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

Zinwell  vs.  Hanpin Electron Co

Zinwell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zinwell 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Hanpin Electron

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hanpin Electron Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hanpin Electron showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zinwell and Hanpin Electron

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

The idea behind Zinwell and Hanpin Electron 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 Global Correlations module to find global opportunities by holding instruments from different markets.