Correlation Between Techshine Electronics and Weihai Honglin

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Can any of the company-specific risk be diversified away by investing in both Techshine Electronics and Weihai Honglin 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 Techshine Electronics and Weihai Honglin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Techshine Electronics Co and Weihai Honglin Electronic, you can compare the effects of market volatilities on Techshine Electronics and Weihai Honglin 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 Techshine Electronics with a short position of Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Techshine Electronics and Weihai Honglin.

Diversification Opportunities for Techshine Electronics and Weihai Honglin

TechshineWeihaiDiversified AwayTechshineWeihaiDiversified Away100%
-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Techshine and Weihai is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Techshine Electronics Co and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic and Techshine Electronics 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 Techshine Electronics Co are associated (or correlated) with Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Techshine Electronics i.e., Techshine Electronics and Weihai Honglin go up and down completely randomly.

Pair Corralation between Techshine Electronics and Weihai Honglin

Assuming the 90 days trading horizon Techshine Electronics is expected to generate 4.8 times less return on investment than Weihai Honglin. But when comparing it to its historical volatility, Techshine Electronics Co is 1.09 times less risky than Weihai Honglin. It trades about 0.03 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,291  in Weihai Honglin Electronic on October 20, 2024 and sell it today you would earn a total of  270.00  from holding Weihai Honglin Electronic or generate 20.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

Techshine Electronics Co  vs.  Weihai Honglin Electronic

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -15-10-505
JavaScript chart by amCharts 3.21.15301379 301439
       Timeline  
Techshine Electronics 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Techshine Electronics Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Techshine Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1819202122
Weihai Honglin Electronic 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Weihai Honglin Electronic are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Weihai Honglin sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1313.51414.51515.516

Techshine Electronics and Weihai Honglin Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.49-6.36-4.23-2.10.02.054.216.378.5310.69 0.0200.0250.0300.0350.0400.0450.0500.055
JavaScript chart by amCharts 3.21.15301379 301439
       Returns  

Pair Trading with Techshine Electronics and Weihai Honglin

The main advantage of trading using opposite Techshine Electronics and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techshine Electronics position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.
The idea behind Techshine Electronics Co and Weihai Honglin Electronic 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.

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