Correlation Between Hiwin Mikrosystem and Strong H

Can any of the company-specific risk be diversified away by investing in both Hiwin Mikrosystem and Strong H 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 Hiwin Mikrosystem and Strong H into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hiwin Mikrosystem Corp and Strong H Machinery, you can compare the effects of market volatilities on Hiwin Mikrosystem and Strong H 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 Hiwin Mikrosystem with a short position of Strong H. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hiwin Mikrosystem and Strong H.

Diversification Opportunities for Hiwin Mikrosystem and Strong H

-0.3

Correlation Coefficient

Hiwin Mikrosystem  Strong H

Very good diversification

The 3 months correlation between Hiwin and Strong is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hiwin Mikrosystem Corp and Strong H Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strong H Machinery and Hiwin Mikrosystem 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 Hiwin Mikrosystem Corp are associated (or correlated) with Strong H. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strong H Machinery has no effect on the direction of Hiwin Mikrosystem i.e., Hiwin Mikrosystem and Strong H go up and down completely randomly.

Pair Corralation between Hiwin Mikrosystem and Strong H

Assuming the 90 days trading horizon Hiwin Mikrosystem is expected to generate 4.09 times less return on investment than Strong H. In addition to that, Hiwin Mikrosystem is 3.61 times more volatile than Strong H Machinery. It trades about 0.01 of its total potential returns per unit of risk. Strong H Machinery is currently generating about 0.07 per unit of volatility. If you would invest  3,565  in Strong H Machinery on December 23, 2024 and sell it today you would earn a total of  135.00  from holding Strong H Machinery or generate 3.79% return on investment over 90 days.

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

Hiwin Mikrosystem Corp  vs.  Strong H Machinery

Hiwin Mikrosystem Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hiwin Mikrosystem Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hiwin Mikrosystem is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Strong H Machinery

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Strong H Machinery are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Strong H 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 Hiwin Mikrosystem and Strong H

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

The idea behind Hiwin Mikrosystem Corp and Strong H Machinery 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.