Correlation Between Associated Industries and In Win

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

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

Diversification Opportunities for Associated Industries and In Win

0.36

Correlation Coefficient

Associated Industries  In Win

Weak diversification

The 3 months correlation between Associated and 6117 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Associated Industries China and In Win Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on In Win Development and Associated Industries 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 Associated Industries China are associated (or correlated) with In Win. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of In Win Development has no effect on the direction of Associated Industries i.e., Associated Industries and In Win go up and down completely randomly.

Pair Corralation between Associated Industries and In Win

Assuming the 90 days trading horizon Associated Industries China is expected to under-perform the In Win. But the stock apears to be less risky and, when comparing its historical volatility, Associated Industries China is 2.5 times less risky than In Win. The stock trades about -0.01 of its potential returns per unit of risk. The In Win Development is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  9,010  in In Win Development on September 18, 2024 and sell it today you would earn a total of  120.00  from holding In Win Development or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Associated Industries China  vs.  In Win Development

Associated Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Associated Industries China has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Associated Industries is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

In Win Development

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in In Win Development are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, In Win is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Associated Industries and In Win

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

The idea behind Associated Industries China and In Win Development 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.