Correlation Between An Shin and Nan Pao
Can any of the company-specific risk be diversified away by investing in both An Shin and Nan Pao 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 An Shin and Nan Pao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between An Shin Food Services and Nan Pao Resins, you can compare the effects of market volatilities on An Shin and Nan Pao 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 An Shin with a short position of Nan Pao. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Shin and Nan Pao.
Diversification Opportunities for An Shin and Nan Pao
Very good diversification
The 3 months correlation between 1259 and Nan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding An Shin Food Services and Nan Pao Resins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Pao Resins and An Shin 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 An Shin Food Services are associated (or correlated) with Nan Pao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Pao Resins has no effect on the direction of An Shin i.e., An Shin and Nan Pao go up and down completely randomly.
Pair Corralation between An Shin and Nan Pao
Assuming the 90 days trading horizon An Shin Food Services is expected to under-perform the Nan Pao. But the stock apears to be less risky and, when comparing its historical volatility, An Shin Food Services is 2.72 times less risky than Nan Pao. The stock trades about -0.17 of its potential returns per unit of risk. The Nan Pao Resins is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 28,500 in Nan Pao Resins on October 7, 2024 and sell it today you would earn a total of 3,250 from holding Nan Pao Resins or generate 11.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
An Shin Food Services vs. Nan Pao Resins
Performance |
Timeline |
An Shin Food |
Nan Pao Resins |
An Shin and Nan Pao Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with An Shin and Nan Pao
The main advantage of trading using opposite An Shin and Nan Pao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Shin position performs unexpectedly, Nan Pao 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 Nan Pao will offset losses from the drop in Nan Pao's long position.An Shin vs. ABC Taiwan Electronics | An Shin vs. Lien Chang Electronic | An Shin vs. Higher Way Electronic | An Shin vs. Pacific Hospital Supply |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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