Correlation Between Well Shin and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Well Shin and NYSE Composite 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 Well Shin and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Well Shin Technology and NYSE Composite, you can compare the effects of market volatilities on Well Shin and NYSE Composite 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 Well Shin with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Well Shin and NYSE Composite.
Diversification Opportunities for Well Shin and NYSE Composite
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Well and NYSE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Well Shin Technology and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Well Shin 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 Well Shin Technology are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Well Shin i.e., Well Shin and NYSE Composite go up and down completely randomly.
Pair Corralation between Well Shin and NYSE Composite
Assuming the 90 days trading horizon Well Shin Technology is expected to generate 1.98 times more return on investment than NYSE Composite. However, Well Shin is 1.98 times more volatile than NYSE Composite. It trades about 0.29 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.06 per unit of risk. If you would invest 5,720 in Well Shin Technology on February 4, 2024 and sell it today you would earn a total of 440.00 from holding Well Shin Technology or generate 7.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 86.36% |
Values | Daily Returns |
Well Shin Technology vs. NYSE Composite
Performance |
Timeline |
Well Shin and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Well Shin Technology
Pair trading matchups for Well Shin
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Well Shin and NYSE Composite
The main advantage of trading using opposite Well Shin and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Well Shin position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Well Shin vs. I Sheng Electric Wire | Well Shin vs. Young Optics | Well Shin vs. TXC Corp | Well Shin vs. FSP Technology |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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