Correlation Between Chenming Mold and In Win

Can any of the company-specific risk be diversified away by investing in both Chenming Mold and In Win 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 Chenming Mold and In Win into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chenming Mold Industrial and In Win Development, you can compare the effects of market volatilities on Chenming Mold and In Win 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 Chenming Mold with a short position of In Win. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chenming Mold and In Win.

Diversification Opportunities for Chenming Mold and In Win

0.37

Correlation Coefficient

Chenming Mold  In Win

Weak diversification

The 3 months correlation between Chenming and 6117 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chenming Mold Industrial and In Win Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In Win Development and Chenming Mold 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 Chenming Mold Industrial are associated (or correlated) with In Win. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In Win Development has no effect on the direction of Chenming Mold i.e., Chenming Mold and In Win go up and down completely randomly.

Pair Corralation between Chenming Mold and In Win

Assuming the 90 days trading horizon Chenming Mold Industrial is expected to under-perform the In Win. In addition to that, Chenming Mold is 1.02 times more volatile than In Win Development. It trades about -0.06 of its total potential returns per unit of risk. In Win Development is currently generating about 0.03 per unit of volatility. If you would invest  9,020  in In Win Development on September 18, 2024 and sell it today you would earn a total of  110.00  from holding In Win Development or generate 1.22% return on investment over 90 days.

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

Chenming Mold Industrial  vs.  In Win Development

Chenming Mold Industrial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chenming Mold Industrial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chenming Mold showed solid returns over the last few months and may actually be approaching a breakup point.

In Win Development

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in In Win Development are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, In Win is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Chenming Mold and In Win

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

The idea behind Chenming Mold Industrial and In Win Development 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.