Correlation Between In Win and Chenming Mold

Can any of the company-specific risk be diversified away by investing in both In Win and Chenming Mold 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 In Win and Chenming Mold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between In Win Development and Chenming Mold Industrial, you can compare the effects of market volatilities on In Win and Chenming Mold 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 In Win with a short position of Chenming Mold. Check out your portfolio center. Please also check ongoing floating volatility patterns of In Win and Chenming Mold.

Diversification Opportunities for In Win and Chenming Mold

0.08

Correlation Coefficient

In Win  Chenming Mold

Significant diversification

The 3 months correlation between 6117 and Chenming is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding In Win Development and Chenming Mold Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chenming Mold Industrial and In Win 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 In Win Development are associated (or correlated) with Chenming Mold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chenming Mold Industrial has no effect on the direction of In Win i.e., In Win and Chenming Mold go up and down completely randomly.

Pair Corralation between In Win and Chenming Mold

Assuming the 90 days trading horizon In Win Development is expected to generate 1.21 times more return on investment than Chenming Mold. However, In Win is 1.21 times more volatile than Chenming Mold Industrial. It trades about 0.05 of its potential returns per unit of risk. Chenming Mold Industrial is currently generating about -0.03 per unit of risk. If you would invest  9,110  in In Win Development on December 28, 2024 and sell it today you would earn a total of  560.00  from holding In Win Development or generate 6.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.21%
Values	Daily Returns

In Win Development  vs.  Chenming Mold Industrial

In Win Development

Risk-Adjusted Performance

Insignificant

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

Chenming Mold Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chenming Mold Industrial 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 In Win and Chenming Mold

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

The idea behind In Win Development and Chenming Mold Industrial 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.