Correlation Between Shengtak New and Winner Medical Co

Can any of the company-specific risk be diversified away by investing in both Shengtak New and Winner Medical Co 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 Shengtak New and Winner Medical Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Shengtak New and Winner Medical Co

0.53

Correlation Coefficient

Shengtak New  Winner Medical Co

Very weak diversification

The 3 months correlation between Shengtak and Winner is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shengtak New Material and Winner Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Medical Co and Shengtak New 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 Shengtak New Material are associated (or correlated) with Winner Medical Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Medical Co has no effect on the direction of Shengtak New i.e., Shengtak New and Winner Medical Co go up and down completely randomly.

Pair Corralation between Shengtak New and Winner Medical Co

Assuming the 90 days trading horizon Shengtak New Material is expected to generate 1.09 times more return on investment than Winner Medical Co. However, Shengtak New is 1.09 times more volatile than Winner Medical Co. It trades about 0.1 of its potential returns per unit of risk. Winner Medical Co is currently generating about 0.05 per unit of risk. If you would invest  3,157  in Shengtak New Material on December 26, 2024 and sell it today you would earn a total of  518.00  from holding Shengtak New Material or generate 16.41% return on investment over 90 days.

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

Shengtak New Material  vs.  Winner Medical Co

Shengtak New Material

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shengtak New Material are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shengtak New sustained solid returns over the last few months and may actually be approaching a breakup point.

Winner Medical Co

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Winner Medical Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Winner Medical Co may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Shengtak New and Winner Medical Co

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

The idea behind Shengtak New Material and Winner Medical 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.