Correlation Between Shieh Yih and Healthconn Corp

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

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

Diversification Opportunities for Shieh Yih and Healthconn Corp

0.53

Correlation Coefficient

Shieh Yih  Healthconn Corp

Very weak diversification

The 3 months correlation between Shieh and Healthconn is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shieh Yih Machinery and Healthconn Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthconn Corp and Shieh Yih 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 Shieh Yih Machinery are associated (or correlated) with Healthconn Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthconn Corp has no effect on the direction of Shieh Yih i.e., Shieh Yih and Healthconn Corp go up and down completely randomly.

Pair Corralation between Shieh Yih and Healthconn Corp

Assuming the 90 days trading horizon Shieh Yih Machinery is expected to generate 1.24 times more return on investment than Healthconn Corp. However, Shieh Yih is 1.24 times more volatile than Healthconn Corp. It trades about 0.04 of its potential returns per unit of risk. Healthconn Corp is currently generating about -0.25 per unit of risk. If you would invest  3,815  in Shieh Yih Machinery on September 26, 2024 and sell it today you would earn a total of  55.00  from holding Shieh Yih Machinery or generate 1.44% return on investment over 90 days.

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

Shieh Yih Machinery  vs.  Healthconn Corp

Shieh Yih Machinery

Risk-Adjusted Performance

0 of 100

Very Weak

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

Healthconn Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthconn Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Shieh Yih and Healthconn Corp

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

The idea behind Shieh Yih Machinery and Healthconn Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.