Correlation Between Traeger and Man Wah

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

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

Diversification Opportunities for Traeger and Man Wah

-0.64

Correlation Coefficient

Traeger  Man Wah

Excellent diversification

The 3 months correlation between Traeger and Man is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Traeger and Man Wah Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Man Wah Holdings and Traeger 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 Traeger are associated (or correlated) with Man Wah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Man Wah Holdings has no effect on the direction of Traeger i.e., Traeger and Man Wah go up and down completely randomly.

Pair Corralation between Traeger and Man Wah

Given the investment horizon of 90 days Traeger is expected to generate 0.94 times more return on investment than Man Wah. However, Traeger is 1.06 times less risky than Man Wah. It trades about 0.03 of its potential returns per unit of risk. Man Wah Holdings is currently generating about 0.01 per unit of risk. If you would invest  256.00  in Traeger on September 14, 2024 and sell it today you would earn a total of  49.00  from holding Traeger or generate 19.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	83.2%
Values	Daily Returns

Traeger  vs.  Man Wah Holdings

Traeger

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Traeger has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Man Wah Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Man Wah Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical indicators, Man Wah showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Traeger and Man Wah

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

The idea behind Traeger and Man Wah Holdings 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.