Correlation Between Wan Hai and Sincere Navigation

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

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

Diversification Opportunities for Wan Hai and Sincere Navigation

0.79

Correlation Coefficient

Wan Hai  Sincere Navigation

Poor diversification

The 3 months correlation between Wan and Sincere is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Wan Hai Lines and Sincere Navigation Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sincere Navigation Corp and Wan Hai 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 Wan Hai Lines are associated (or correlated) with Sincere Navigation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sincere Navigation Corp has no effect on the direction of Wan Hai i.e., Wan Hai and Sincere Navigation go up and down completely randomly.

Pair Corralation between Wan Hai and Sincere Navigation

Assuming the 90 days trading horizon Wan Hai is expected to generate 1.4 times less return on investment than Sincere Navigation. In addition to that, Wan Hai is 1.19 times more volatile than Sincere Navigation Corp. It trades about 0.02 of its total potential returns per unit of risk. Sincere Navigation Corp is currently generating about 0.03 per unit of volatility. If you would invest  1,935  in Sincere Navigation Corp on October 4, 2024 and sell it today you would earn a total of  570.00  from holding Sincere Navigation Corp or generate 29.46% return on investment over 90 days.

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

Wan Hai Lines  vs.  Sincere Navigation Corp

Wan Hai Lines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wan Hai Lines 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.

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 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.

Pair Trading with Wan Hai and Sincere Navigation

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

The idea behind Wan Hai Lines and Sincere Navigation Corp 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.

Check out your portfolio center.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.