Correlation Between New Asia and WINSON Machinery

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Can any of the company-specific risk be diversified away by investing in both New Asia and WINSON Machinery 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 New Asia and WINSON Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Asia Construction and WINSON Machinery Co, you can compare the effects of market volatilities on New Asia and WINSON Machinery 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 New Asia with a short position of WINSON Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Asia and WINSON Machinery.

Diversification Opportunities for New Asia and WINSON Machinery

NewWINSONDiversified AwayNewWINSONDiversified Away100%
-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between New and WINSON is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding New Asia Construction and WINSON Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINSON Machinery and New Asia 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 New Asia Construction are associated (or correlated) with WINSON Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINSON Machinery has no effect on the direction of New Asia i.e., New Asia and WINSON Machinery go up and down completely randomly.

Pair Corralation between New Asia and WINSON Machinery

Assuming the 90 days trading horizon New Asia Construction is expected to generate 1.47 times more return on investment than WINSON Machinery. However, New Asia is 1.47 times more volatile than WINSON Machinery Co. It trades about 0.21 of its potential returns per unit of risk. WINSON Machinery Co is currently generating about -0.11 per unit of risk. If you would invest  1,215  in New Asia Construction on October 21, 2024 and sell it today you would earn a total of  560.00  from holding New Asia Construction or generate 46.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

New Asia Construction  vs.  WINSON Machinery Co

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -1001020
JavaScript chart by amCharts 3.21.152516 4538
       Timeline  
New Asia Construction 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in New Asia Construction are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, New Asia showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan121314151617
WINSON Machinery 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days WINSON Machinery Co 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan171819202122

New Asia and WINSON Machinery Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.96-6.71-4.46-2.210.04192.515.037.5410.05 0.020.040.060.08
JavaScript chart by amCharts 3.21.152516 4538
       Returns  

Pair Trading with New Asia and WINSON Machinery

The main advantage of trading using opposite New Asia and WINSON Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Asia position performs unexpectedly, WINSON Machinery 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 WINSON Machinery will offset losses from the drop in WINSON Machinery's long position.
The idea behind New Asia Construction and WINSON Machinery 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 Stocks Directory module to find actively traded stocks across global markets.

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