Correlation Between Shinkong Insurance and Castles Technology
Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Castles Technology 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 Castles Technology 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 Castles Technology Co, you can compare the effects of market volatilities on Shinkong Insurance and Castles Technology 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 Castles Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Castles Technology.
Diversification Opportunities for Shinkong Insurance and Castles Technology
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shinkong and Castles is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Castles Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castles Technology 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 Castles Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castles Technology has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Castles Technology go up and down completely randomly.
Pair Corralation between Shinkong Insurance and Castles Technology
Assuming the 90 days trading horizon Shinkong Insurance Co is expected to generate 0.53 times more return on investment than Castles Technology. However, Shinkong Insurance Co is 1.89 times less risky than Castles Technology. It trades about 0.06 of its potential returns per unit of risk. Castles Technology Co is currently generating about -0.1 per unit of risk. If you would invest 9,620 in Shinkong Insurance Co on September 26, 2024 and sell it today you would earn a total of 930.00 from holding Shinkong Insurance Co or generate 9.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Shinkong Insurance Co vs. Castles Technology Co
Performance |
Timeline |
Shinkong Insurance |
Castles Technology |
Shinkong Insurance and Castles Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shinkong Insurance and Castles Technology
The main advantage of trading using opposite Shinkong Insurance and Castles Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, Castles Technology 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 Castles Technology will offset losses from the drop in Castles Technology'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 |
Castles Technology vs. Gold Rain Enterprises | Castles Technology vs. Cipherlab Co | Castles Technology vs. Accton Technology Corp | Castles Technology vs. Wah Hong 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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