Correlation Between Sincere Navigation and Shih Wei

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

By analyzing existing cross correlation between Sincere Navigation Corp and Shih Wei Navigation, you can compare the effects of market volatilities on Sincere Navigation and Shih Wei 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 Sincere Navigation with a short position of Shih Wei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sincere Navigation and Shih Wei.

Diversification Opportunities for Sincere Navigation and Shih Wei

0.89

Correlation Coefficient

Sincere Navigation  Shih Wei

Very poor diversification

The 3 months correlation between Sincere and Shih is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sincere Navigation Corp and Shih Wei Navigation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shih Wei Navigation and Sincere Navigation 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 Sincere Navigation Corp are associated (or correlated) with Shih Wei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shih Wei Navigation has no effect on the direction of Sincere Navigation i.e., Sincere Navigation and Shih Wei go up and down completely randomly.

Pair Corralation between Sincere Navigation and Shih Wei

Assuming the 90 days trading horizon Sincere Navigation Corp is expected to under-perform the Shih Wei. In addition to that, Sincere Navigation is 1.01 times more volatile than Shih Wei Navigation. It trades about -0.09 of its total potential returns per unit of risk. Shih Wei Navigation is currently generating about -0.08 per unit of volatility. If you would invest  1,780  in Shih Wei Navigation on October 9, 2024 and sell it today you would lose (130.00) from holding Shih Wei Navigation or give up 7.3% of portfolio value over 90 days.

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

Sincere Navigation Corp  vs.  Shih Wei Navigation

Sincere Navigation Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sincere Navigation Corp 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.

Shih Wei Navigation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shih Wei Navigation 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 Sincere Navigation and Shih Wei

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

The idea behind Sincere Navigation Corp and Shih Wei Navigation 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.