Correlation Between Wha Yu and ThinTech Materials

Can any of the company-specific risk be diversified away by investing in both Wha Yu and ThinTech Materials 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 Wha Yu and ThinTech Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wha Yu Industrial and ThinTech Materials Technology, you can compare the effects of market volatilities on Wha Yu and ThinTech Materials 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 Wha Yu with a short position of ThinTech Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wha Yu and ThinTech Materials.

Diversification Opportunities for Wha Yu and ThinTech Materials

-0.39

Correlation Coefficient

Wha Yu  ThinTech Materials

Very good diversification

The 3 months correlation between Wha and ThinTech is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Wha Yu Industrial and ThinTech Materials Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThinTech Materials and Wha Yu 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 Wha Yu Industrial are associated (or correlated) with ThinTech Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThinTech Materials has no effect on the direction of Wha Yu i.e., Wha Yu and ThinTech Materials go up and down completely randomly.

Pair Corralation between Wha Yu and ThinTech Materials

Assuming the 90 days trading horizon Wha Yu is expected to generate 8.17 times less return on investment than ThinTech Materials. But when comparing it to its historical volatility, Wha Yu Industrial is 1.52 times less risky than ThinTech Materials. It trades about 0.01 of its potential returns per unit of risk. ThinTech Materials Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,830  in ThinTech Materials Technology on October 10, 2024 and sell it today you would earn a total of  4,310  from holding ThinTech Materials Technology or generate 152.3% return on investment over 90 days.

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

Wha Yu Industrial  vs.  ThinTech Materials Technology

Wha Yu Industrial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wha Yu Industrial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Wha Yu may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ThinTech Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ThinTech Materials Technology 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.

Pair Trading with Wha Yu and ThinTech Materials

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

The idea behind Wha Yu Industrial and ThinTech Materials 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.