Correlation Between Shinkong Insurance and TOPBI International
Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and TOPBI International 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 Shinkong Insurance and TOPBI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinkong Insurance Co and TOPBI International Holdings, you can compare the effects of market volatilities on Shinkong Insurance and TOPBI International 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 Shinkong Insurance with a short position of TOPBI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and TOPBI International.
Diversification Opportunities for Shinkong Insurance and TOPBI International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinkong and TOPBI is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and TOPBI International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPBI International and Shinkong Insurance 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 Shinkong Insurance Co are associated (or correlated) with TOPBI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPBI International has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and TOPBI International go up and down completely randomly.
Pair Corralation between Shinkong Insurance and TOPBI International
Assuming the 90 days trading horizon Shinkong Insurance is expected to generate 2.55 times less return on investment than TOPBI International. But when comparing it to its historical volatility, Shinkong Insurance Co is 1.9 times less risky than TOPBI International. It trades about 0.14 of its potential returns per unit of risk. TOPBI International Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,355 in TOPBI International Holdings on September 25, 2024 and sell it today you would earn a total of 155.00 from holding TOPBI International Holdings or generate 11.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shinkong Insurance Co vs. TOPBI International Holdings
Performance |
Timeline |
Shinkong Insurance |
TOPBI International |
Shinkong Insurance and TOPBI International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinkong Insurance and TOPBI International
The main advantage of trading using opposite Shinkong Insurance and TOPBI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, TOPBI International 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 TOPBI International will offset losses from the drop in TOPBI International's long position.Shinkong Insurance vs. Taiwan Semiconductor Manufacturing | Shinkong Insurance vs. Hon Hai Precision | Shinkong Insurance vs. MediaTek | Shinkong Insurance vs. Chunghwa Telecom Co |
TOPBI International vs. Makalot Industrial Co | TOPBI International vs. Quang Viet Enterprise | TOPBI International vs. Shinkong Textile Co | TOPBI International vs. Tah Hsin Industrial |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |