Correlation Between Connection Technology and Shinkong Insurance

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

By analyzing existing cross correlation between Connection Technology Systems and Shinkong Insurance Co, you can compare the effects of market volatilities on Connection Technology and Shinkong Insurance 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 Connection Technology with a short position of Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connection Technology and Shinkong Insurance.

Diversification Opportunities for Connection Technology and Shinkong Insurance

-0.69

Correlation Coefficient

Connection Technology  Shinkong Insurance

Excellent diversification

The 3 months correlation between Connection and Shinkong is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Connection Technology Systems and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and Connection Technology 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 Connection Technology Systems are associated (or correlated) with Shinkong Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Insurance has no effect on the direction of Connection Technology i.e., Connection Technology and Shinkong Insurance go up and down completely randomly.

Pair Corralation between Connection Technology and Shinkong Insurance

Assuming the 90 days trading horizon Connection Technology Systems is expected to under-perform the Shinkong Insurance. In addition to that, Connection Technology is 2.46 times more volatile than Shinkong Insurance Co. It trades about -0.05 of its total potential returns per unit of risk. Shinkong Insurance Co is currently generating about 0.04 per unit of volatility. If you would invest  9,960  in Shinkong Insurance Co on October 24, 2024 and sell it today you would earn a total of  290.00  from holding Shinkong Insurance Co or generate 2.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Connection Technology Systems  vs.  Shinkong Insurance Co

Connection Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Connection Technology Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Shinkong Insurance

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shinkong Insurance Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Shinkong Insurance is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Connection Technology and Shinkong Insurance

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

The idea behind Connection Technology Systems and Shinkong Insurance Co 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.