Correlation Between Cheng Shin and Jinli Group
Can any of the company-specific risk be diversified away by investing in both Cheng Shin and Jinli Group 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 Jinli Group 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 Jinli Group Holdings, you can compare the effects of market volatilities on Cheng Shin and Jinli Group 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 Jinli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Shin and Jinli Group.
Diversification Opportunities for Cheng Shin and Jinli Group
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cheng and Jinli is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Shin Rubber and Jinli Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinli Group Holdings 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 Jinli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinli Group Holdings has no effect on the direction of Cheng Shin i.e., Cheng Shin and Jinli Group go up and down completely randomly.
Pair Corralation between Cheng Shin and Jinli Group
Assuming the 90 days trading horizon Cheng Shin Rubber is expected to generate 0.35 times more return on investment than Jinli Group. However, Cheng Shin Rubber is 2.88 times less risky than Jinli Group. It trades about 0.04 of its potential returns per unit of risk. Jinli Group Holdings is currently generating about 0.0 per unit of risk. If you would invest 5,020 in Cheng Shin Rubber on September 26, 2024 and sell it today you would earn a total of 50.00 from holding Cheng Shin Rubber or generate 1.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cheng Shin Rubber vs. Jinli Group Holdings
Performance |
Timeline |
Cheng Shin Rubber |
Jinli Group Holdings |
Cheng Shin and Jinli Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cheng Shin and Jinli Group
The main advantage of trading using opposite Cheng Shin and Jinli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheng Shin position performs unexpectedly, Jinli Group 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 Jinli Group will offset losses from the drop in Jinli Group's long position.Cheng Shin vs. Merida Industry Co | Cheng Shin vs. Uni President Enterprises Corp | Cheng Shin vs. Pou Chen Corp |
Jinli Group vs. Merida Industry Co | Jinli Group vs. Cheng Shin Rubber | Jinli Group vs. Uni President Enterprises Corp | Jinli Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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