Correlation Between WINSON Machinery and Emerging Display

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

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

Diversification Opportunities for WINSON Machinery and Emerging Display

-0.24

Correlation Coefficient

WINSON Machinery  Emerging Display

Very good diversification

The 3 months correlation between WINSON and Emerging is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding WINSON Machinery Co and Emerging Display Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Display Tec and WINSON Machinery 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 WINSON Machinery Co are associated (or correlated) with Emerging Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Display Tec has no effect on the direction of WINSON Machinery i.e., WINSON Machinery and Emerging Display go up and down completely randomly.

Pair Corralation between WINSON Machinery and Emerging Display

Assuming the 90 days trading horizon WINSON Machinery Co is expected to generate 1.37 times more return on investment than Emerging Display. However, WINSON Machinery is 1.37 times more volatile than Emerging Display Technologies. It trades about 0.0 of its potential returns per unit of risk. Emerging Display Technologies is currently generating about -0.03 per unit of risk. If you would invest  2,010  in WINSON Machinery Co on September 28, 2024 and sell it today you would lose (60.00) from holding WINSON Machinery Co or give up 2.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.07%
Values	Daily Returns

WINSON Machinery Co  vs.  Emerging Display Technologies

WINSON Machinery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WINSON Machinery Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Emerging Display Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emerging Display Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Emerging Display 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 WINSON Machinery and Emerging Display

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

The idea behind WINSON Machinery Co and Emerging Display Technologies 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..