Correlation Between Uni President and Shinkong Textile
Can any of the company-specific risk be diversified away by investing in both Uni President and Shinkong Textile 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 Uni President and Shinkong Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uni President Enterprises Corp and Shinkong Textile Co, you can compare the effects of market volatilities on Uni President and Shinkong Textile 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 Uni President with a short position of Shinkong Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uni President and Shinkong Textile.
Diversification Opportunities for Uni President and Shinkong Textile
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uni and Shinkong is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Uni President Enterprises Corp and Shinkong Textile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Textile and Uni President 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 Uni President Enterprises Corp are associated (or correlated) with Shinkong Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Textile has no effect on the direction of Uni President i.e., Uni President and Shinkong Textile go up and down completely randomly.
Pair Corralation between Uni President and Shinkong Textile
Assuming the 90 days trading horizon Uni President Enterprises Corp is expected to generate 1.59 times more return on investment than Shinkong Textile. However, Uni President is 1.59 times more volatile than Shinkong Textile Co. It trades about -0.15 of its potential returns per unit of risk. Shinkong Textile Co is currently generating about -0.35 per unit of risk. If you would invest 8,700 in Uni President Enterprises Corp on September 25, 2024 and sell it today you would lose (390.00) from holding Uni President Enterprises Corp or give up 4.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Uni President Enterprises Corp vs. Shinkong Textile Co
Performance |
Timeline |
Uni President Enterp |
Shinkong Textile |
Uni President and Shinkong Textile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uni President and Shinkong Textile
The main advantage of trading using opposite Uni President and Shinkong Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uni President position performs unexpectedly, Shinkong Textile 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 Shinkong Textile will offset losses from the drop in Shinkong Textile's long position.Uni President vs. Taisun Enterprise Co | Uni President vs. De Licacy Industrial | Uni President vs. Wisher Industrial Co | Uni President vs. Tainan Enterprises Co |
Shinkong Textile vs. Merida Industry Co | Shinkong Textile vs. Cheng Shin Rubber | Shinkong Textile vs. Uni President Enterprises Corp | Shinkong Textile vs. Pou Chen Corp |
Check out your portfolio center.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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Transaction History View history of all your transactions and understand their impact on performance | |
Stocks Directory Find actively traded stocks across global markets |