Correlation Between State Grid and Wintime Energy

Can any of the company-specific risk be diversified away by investing in both State Grid and Wintime Energy 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 State Grid and Wintime Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between State Grid InformationCommunication and Wintime Energy Co, you can compare the effects of market volatilities on State Grid and Wintime Energy 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 State Grid with a short position of Wintime Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Wintime Energy.

Diversification Opportunities for State Grid and Wintime Energy

0.0

Correlation Coefficient

State Grid  Wintime Energy

Pay attention - limited upside

The 3 months correlation between State and Wintime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Wintime Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintime Energy and State Grid 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 State Grid InformationCommunication are associated (or correlated) with Wintime Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintime Energy has no effect on the direction of State Grid i.e., State Grid and Wintime Energy go up and down completely randomly.

Pair Corralation between State Grid and Wintime Energy

If you would invest (100.00) in Wintime Energy Co on October 11, 2024 and sell it today you would earn a total of  100.00  from holding Wintime Energy Co or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

State Grid InformationCommunic  vs.  Wintime Energy Co

State Grid Informati

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days State Grid InformationCommunication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, State Grid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wintime Energy

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Wintime Energy Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Wintime Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with State Grid and Wintime Energy

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

The idea behind State Grid InformationCommunication and Wintime Energy Co 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.