Correlation Between Shin Tai and Yi Jinn
Can any of the company-specific risk be diversified away by investing in both Shin Tai and Yi Jinn 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 Shin Tai and Yi Jinn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Tai Industry and Yi Jinn Industrial, you can compare the effects of market volatilities on Shin Tai and Yi Jinn 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 Shin Tai with a short position of Yi Jinn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Tai and Yi Jinn.
Diversification Opportunities for Shin Tai and Yi Jinn
Significant diversification
The 3 months correlation between Shin and 1457 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Shin Tai Industry and Yi Jinn Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yi Jinn Industrial and Shin Tai 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 Shin Tai Industry are associated (or correlated) with Yi Jinn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yi Jinn Industrial has no effect on the direction of Shin Tai i.e., Shin Tai and Yi Jinn go up and down completely randomly.
Pair Corralation between Shin Tai and Yi Jinn
Assuming the 90 days trading horizon Shin Tai Industry is expected to generate 1.87 times more return on investment than Yi Jinn. However, Shin Tai is 1.87 times more volatile than Yi Jinn Industrial. It trades about 0.04 of its potential returns per unit of risk. Yi Jinn Industrial is currently generating about 0.02 per unit of risk. If you would invest 6,900 in Shin Tai Industry on December 5, 2024 and sell it today you would earn a total of 2,330 from holding Shin Tai Industry or generate 33.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Shin Tai Industry vs. Yi Jinn Industrial
Performance |
Timeline |
Shin Tai Industry |
Yi Jinn Industrial |
Shin Tai and Yi Jinn Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shin Tai and Yi Jinn
The main advantage of trading using opposite Shin Tai and Yi Jinn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Tai position performs unexpectedly, Yi Jinn 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 Yi Jinn will offset losses from the drop in Yi Jinn's long position.Shin Tai vs. Fwusow Industry Co | Shin Tai vs. TTET Union Corp | Shin Tai vs. Lian Hwa Foods | Shin Tai vs. Formosa Oilseed Processing |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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