Correlation Between WINSON Machinery and Acer E

Can any of the company-specific risk be diversified away by investing in both WINSON Machinery and Acer E 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 Acer E 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 Acer E Enabling Service, you can compare the effects of market volatilities on WINSON Machinery and Acer E 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 Acer E. Check out your portfolio center. Please also check ongoing floating volatility patterns of WINSON Machinery and Acer E.

Diversification Opportunities for WINSON Machinery and Acer E

-0.26

Correlation Coefficient

WINSON Machinery  Acer E

Very good diversification

The 3 months correlation between WINSON and Acer is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding WINSON Machinery Co and Acer E Enabling Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acer E Enabling 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 Acer E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acer E Enabling has no effect on the direction of WINSON Machinery i.e., WINSON Machinery and Acer E go up and down completely randomly.

Pair Corralation between WINSON Machinery and Acer E

Assuming the 90 days trading horizon WINSON Machinery Co is expected to generate 2.02 times more return on investment than Acer E. However, WINSON Machinery is 2.02 times more volatile than Acer E Enabling Service. It trades about 0.0 of its potential returns per unit of risk. Acer E Enabling Service is currently generating about 0.0 per unit of risk. If you would invest  2,075  in WINSON Machinery Co on September 4, 2024 and sell it today you would lose (30.00) from holding WINSON Machinery Co or give up 1.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

WINSON Machinery Co  vs.  Acer E Enabling Service

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 fairly stable basic indicators, WINSON Machinery is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Acer E Enabling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acer E Enabling Service has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Acer E 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 Acer E

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

The idea behind WINSON Machinery Co and Acer E Enabling Service 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.