Correlation Between Cheng Shin and Shinkong Textile
Can any of the company-specific risk be diversified away by investing in both Cheng Shin 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 Cheng Shin and Shinkong Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheng Shin Rubber and Shinkong Textile Co, you can compare the effects of market volatilities on Cheng Shin 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 Cheng Shin with a short position of Shinkong Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Shin and Shinkong Textile.
Diversification Opportunities for Cheng Shin and Shinkong Textile
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheng and Shinkong is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Shin Rubber and Shinkong Textile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Textile and Cheng 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 Cheng Shin Rubber 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 Cheng Shin i.e., Cheng Shin and Shinkong Textile go up and down completely randomly.
Pair Corralation between Cheng Shin and Shinkong Textile
Assuming the 90 days trading horizon Cheng Shin Rubber is expected to generate 2.0 times more return on investment than Shinkong Textile. However, Cheng Shin is 2.0 times more volatile than Shinkong Textile Co. It trades about 0.08 of its potential returns per unit of risk. Shinkong Textile Co is currently generating about -0.08 per unit of risk. If you would invest 4,675 in Cheng Shin Rubber on September 25, 2024 and sell it today you would earn a total of 325.00 from holding Cheng Shin Rubber or generate 6.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 97.67% |
Values | Daily Returns |
Cheng Shin Rubber vs. Shinkong Textile Co
Performance |
Timeline |
Cheng Shin Rubber |
Shinkong Textile |
Cheng Shin and Shinkong Textile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cheng Shin and Shinkong Textile
The main advantage of trading using opposite Cheng Shin and Shinkong Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheng Shin 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.Cheng Shin vs. Merida Industry Co | Cheng Shin vs. Uni President Enterprises Corp | Cheng Shin vs. Pou Chen Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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