Correlation Between Shih Kuen and Jetwell Computer

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

By analyzing existing cross correlation between Shih Kuen Plastics and Jetwell Computer Co, you can compare the effects of market volatilities on Shih Kuen and Jetwell Computer 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 Shih Kuen with a short position of Jetwell Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shih Kuen and Jetwell Computer.

Diversification Opportunities for Shih Kuen and Jetwell Computer

-0.5

Correlation Coefficient

Shih Kuen  Jetwell Computer

Very good diversification

The 3 months correlation between Shih and Jetwell is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Shih Kuen Plastics and Jetwell Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetwell Computer and Shih Kuen 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 Shih Kuen Plastics are associated (or correlated) with Jetwell Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetwell Computer has no effect on the direction of Shih Kuen i.e., Shih Kuen and Jetwell Computer go up and down completely randomly.

Pair Corralation between Shih Kuen and Jetwell Computer

Assuming the 90 days trading horizon Shih Kuen Plastics is expected to generate 0.15 times more return on investment than Jetwell Computer. However, Shih Kuen Plastics is 6.62 times less risky than Jetwell Computer. It trades about 0.12 of its potential returns per unit of risk. Jetwell Computer Co is currently generating about -0.09 per unit of risk. If you would invest  4,190  in Shih Kuen Plastics on October 23, 2024 and sell it today you would earn a total of  60.00  from holding Shih Kuen Plastics or generate 1.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Shih Kuen Plastics  vs.  Jetwell Computer Co

Shih Kuen Plastics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shih Kuen Plastics 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.

Jetwell Computer

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jetwell Computer Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Jetwell Computer may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Shih Kuen and Jetwell Computer

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

The idea behind Shih Kuen Plastics and Jetwell Computer 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.