Correlation Between Wonderful and An Shin
Can any of the company-specific risk be diversified away by investing in both Wonderful and An Shin 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 Wonderful and An Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonderful Hi Tech Co and An Shin Food Services, you can compare the effects of market volatilities on Wonderful and An Shin 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 Wonderful with a short position of An Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonderful and An Shin.
Diversification Opportunities for Wonderful and An Shin
Poor diversification
The 3 months correlation between Wonderful and 1259 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wonderful Hi Tech Co and An Shin Food Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Shin Food and Wonderful 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 Wonderful Hi Tech Co are associated (or correlated) with An Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Shin Food has no effect on the direction of Wonderful i.e., Wonderful and An Shin go up and down completely randomly.
Pair Corralation between Wonderful and An Shin
Assuming the 90 days trading horizon Wonderful Hi Tech Co is expected to generate 3.95 times more return on investment than An Shin. However, Wonderful is 3.95 times more volatile than An Shin Food Services. It trades about -0.01 of its potential returns per unit of risk. An Shin Food Services is currently generating about -0.2 per unit of risk. If you would invest 3,700 in Wonderful Hi Tech Co on September 25, 2024 and sell it today you would lose (110.00) from holding Wonderful Hi Tech Co or give up 2.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Wonderful Hi Tech Co vs. An Shin Food Services
Performance |
Timeline |
Wonderful Hi Tech |
An Shin Food |
Wonderful and An Shin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wonderful and An Shin
The main advantage of trading using opposite Wonderful and An Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonderful position performs unexpectedly, An Shin 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 An Shin will offset losses from the drop in An Shin's long position.Wonderful vs. Accton Technology Corp | Wonderful vs. HTC Corp | Wonderful vs. Wistron NeWeb Corp | Wonderful vs. Arcadyan Technology Corp |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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