Correlation Between Man Wah and Traeger

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

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

Diversification Opportunities for Man Wah and Traeger

-0.64

Correlation Coefficient

Man Wah  Traeger

Excellent diversification

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

Pair Corralation between Man Wah and Traeger

Assuming the 90 days horizon Man Wah Holdings is expected to generate 1.9 times more return on investment than Traeger. However, Man Wah is 1.9 times more volatile than Traeger. It trades about 0.04 of its potential returns per unit of risk. Traeger is currently generating about -0.04 per unit of risk. If you would invest  1,156  in Man Wah Holdings on September 14, 2024 and sell it today you would earn a total of  83.00  from holding Man Wah Holdings or generate 7.18% return on investment over 90 days.

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

Man Wah Holdings  vs.  Traeger

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.

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.

Pair Trading with Man Wah and Traeger

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

The idea behind Man Wah Holdings and Traeger 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.