Correlation Between Wialan Technologies and Rosinbomb

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

By analyzing existing cross correlation between Wialan Technologies and Rosinbomb, you can compare the effects of market volatilities on Wialan Technologies and Rosinbomb 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 Wialan Technologies with a short position of Rosinbomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wialan Technologies and Rosinbomb.

Diversification Opportunities for Wialan Technologies and Rosinbomb

-0.51

Correlation Coefficient

Wialan Technologies  Rosinbomb

Excellent diversification

The 3 months correlation between Wialan and Rosinbomb is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wialan Technologies and Rosinbomb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rosinbomb and Wialan Technologies 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 Wialan Technologies are associated (or correlated) with Rosinbomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rosinbomb has no effect on the direction of Wialan Technologies i.e., Wialan Technologies and Rosinbomb go up and down completely randomly.

Pair Corralation between Wialan Technologies and Rosinbomb

Given the investment horizon of 90 days Wialan Technologies is expected to under-perform the Rosinbomb. But the pink sheet apears to be less risky and, when comparing its historical volatility, Wialan Technologies is 1.59 times less risky than Rosinbomb. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Rosinbomb is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.16  in Rosinbomb on September 5, 2024 and sell it today you would earn a total of  0.10  from holding Rosinbomb or generate 62.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Wialan Technologies  vs.  Rosinbomb

Wialan Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wialan Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Wialan Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Rosinbomb

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rosinbomb has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Wialan Technologies and Rosinbomb

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

The idea behind Wialan Technologies and Rosinbomb 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.