Correlation Between Shih Wei and Sincere Navigation

Can any of the company-specific risk be diversified away by investing in both Shih Wei and Sincere Navigation 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 Shih Wei and Sincere Navigation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shih Wei Navigation and Sincere Navigation Corp, you can compare the effects of market volatilities on Shih Wei and Sincere Navigation 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 Shih Wei with a short position of Sincere Navigation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shih Wei and Sincere Navigation.

Diversification Opportunities for Shih Wei and Sincere Navigation

0.89

Correlation Coefficient

Shih Wei  Sincere Navigation

Very poor diversification

The 3 months correlation between Shih and Sincere is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shih Wei Navigation and Sincere Navigation Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sincere Navigation Corp and Shih Wei 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 Shih Wei Navigation are associated (or correlated) with Sincere Navigation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sincere Navigation Corp has no effect on the direction of Shih Wei i.e., Shih Wei and Sincere Navigation go up and down completely randomly.

Pair Corralation between Shih Wei and Sincere Navigation

Assuming the 90 days trading horizon Shih Wei Navigation is expected to under-perform the Sincere Navigation. But the stock apears to be less risky and, when comparing its historical volatility, Shih Wei Navigation is 1.45 times less risky than Sincere Navigation. The stock trades about -0.45 of its potential returns per unit of risk. The Sincere Navigation Corp is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest  2,700  in Sincere Navigation Corp on October 9, 2024 and sell it today you would lose (185.00) from holding Sincere Navigation Corp or give up 6.85% of portfolio value over 90 days.

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

Shih Wei Navigation  vs.  Sincere Navigation Corp

Shih Wei Navigation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shih Wei Navigation 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.

Sincere Navigation Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sincere Navigation Corp 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 Shih Wei and Sincere Navigation

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

The idea behind Shih Wei Navigation and Sincere Navigation Corp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.