Correlation Between Circuit Fabology and Biwin Storage

Can any of the company-specific risk be diversified away by investing in both Circuit Fabology and Biwin Storage 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 Circuit Fabology and Biwin Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Circuit Fabology Microelectronics and Biwin Storage Technology, you can compare the effects of market volatilities on Circuit Fabology and Biwin Storage 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 Circuit Fabology with a short position of Biwin Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Circuit Fabology and Biwin Storage.

Diversification Opportunities for Circuit Fabology and Biwin Storage

0.72

Correlation Coefficient

Circuit Fabology  Biwin Storage

Poor diversification

The 3 months correlation between Circuit and Biwin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Circuit Fabology Microelectron and Biwin Storage Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biwin Storage Technology and Circuit Fabology 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 Circuit Fabology Microelectronics are associated (or correlated) with Biwin Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biwin Storage Technology has no effect on the direction of Circuit Fabology i.e., Circuit Fabology and Biwin Storage go up and down completely randomly.

Pair Corralation between Circuit Fabology and Biwin Storage

Assuming the 90 days trading horizon Circuit Fabology is expected to generate 1.07 times less return on investment than Biwin Storage. But when comparing it to its historical volatility, Circuit Fabology Microelectronics is 1.24 times less risky than Biwin Storage. It trades about 0.05 of its potential returns per unit of risk. Biwin Storage Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,972  in Biwin Storage Technology on December 24, 2024 and sell it today you would earn a total of  329.00  from holding Biwin Storage Technology or generate 4.72% return on investment over 90 days.

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

Circuit Fabology Microelectron  vs.  Biwin Storage Technology

Circuit Fabology Mic

Risk-Adjusted Performance

Weak

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

Biwin Storage Technology

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Circuit Fabology and Biwin Storage

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

The idea behind Circuit Fabology Microelectronics and Biwin Storage Technology 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.