Correlation Between Iat Automobile and Biwin Storage

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

By analyzing existing cross correlation between Iat Automobile Technology and Biwin Storage Technology, you can compare the effects of market volatilities on Iat Automobile and Biwin Storage 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 Iat Automobile with a short position of Biwin Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iat Automobile and Biwin Storage.

Diversification Opportunities for Iat Automobile and Biwin Storage

-0.12

Correlation Coefficient

Iat Automobile  Biwin Storage

Good diversification

The 3 months correlation between Iat and Biwin is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Iat Automobile Technology and Biwin Storage Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biwin Storage Technology and Iat Automobile 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 Iat Automobile Technology are associated (or correlated) with Biwin Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biwin Storage Technology has no effect on the direction of Iat Automobile i.e., Iat Automobile and Biwin Storage go up and down completely randomly.

Pair Corralation between Iat Automobile and Biwin Storage

Assuming the 90 days trading horizon Iat Automobile Technology is expected to under-perform the Biwin Storage. But the stock apears to be less risky and, when comparing its historical volatility, Iat Automobile Technology is 1.02 times less risky than Biwin Storage. The stock trades about -0.06 of its potential returns per unit of risk. The Biwin Storage Technology is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  6,390  in Biwin Storage Technology on October 7, 2024 and sell it today you would lose (454.00) from holding Biwin Storage Technology or give up 7.1% of portfolio value over 90 days.

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

Iat Automobile Technology  vs.  Biwin Storage Technology

Iat Automobile Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iat Automobile Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Biwin Storage Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biwin Storage Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Iat Automobile and Biwin Storage

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

The idea behind Iat Automobile Technology and Biwin Storage Technology 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.