Correlation Between Shin Shin and TTET Union

Can any of the company-specific risk be diversified away by investing in both Shin Shin and TTET Union 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 Shin Shin and TTET Union into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shin Shin Co and TTET Union Corp, you can compare the effects of market volatilities on Shin Shin and TTET Union 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 Shin Shin with a short position of TTET Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Shin and TTET Union.

Diversification Opportunities for Shin Shin and TTET Union

0.01

Correlation Coefficient

Shin Shin  TTET Union

Significant diversification

The 3 months correlation between Shin and TTET is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Shin Shin Co and TTET Union Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTET Union Corp and Shin 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 Shin Shin Co are associated (or correlated) with TTET Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTET Union Corp has no effect on the direction of Shin Shin i.e., Shin Shin and TTET Union go up and down completely randomly.

Pair Corralation between Shin Shin and TTET Union

Assuming the 90 days trading horizon Shin Shin Co is expected to generate 1.69 times more return on investment than TTET Union. However, Shin Shin is 1.69 times more volatile than TTET Union Corp. It trades about 0.0 of its potential returns per unit of risk. TTET Union Corp is currently generating about -0.15 per unit of risk. If you would invest  2,730  in Shin Shin Co on October 24, 2024 and sell it today you would lose (5.00) from holding Shin Shin Co or give up 0.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shin Shin Co  vs.  TTET Union Corp

Shin Shin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shin Shin Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Shin Shin is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

TTET Union Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TTET Union Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, TTET Union is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Shin Shin and TTET Union

The main advantage of trading using opposite Shin Shin and TTET Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Shin position performs unexpectedly, TTET Union 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 TTET Union will offset losses from the drop in TTET Union's long position.

The idea behind Shin Shin Co and TTET Union Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.