Correlation Between Shieh Yih and Datavan International

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

By analyzing existing cross correlation between Shieh Yih Machinery and Datavan International, you can compare the effects of market volatilities on Shieh Yih and Datavan 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 Shieh Yih with a short position of Datavan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shieh Yih and Datavan International.

Diversification Opportunities for Shieh Yih and Datavan International

0.13

Correlation Coefficient

Shieh Yih  Datavan International

Average diversification

The 3 months correlation between Shieh and Datavan is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Shieh Yih Machinery and Datavan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datavan International and Shieh Yih 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 Shieh Yih Machinery are associated (or correlated) with Datavan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datavan International has no effect on the direction of Shieh Yih i.e., Shieh Yih and Datavan International go up and down completely randomly.

Pair Corralation between Shieh Yih and Datavan International

Assuming the 90 days trading horizon Shieh Yih Machinery is expected to generate 1.29 times more return on investment than Datavan International. However, Shieh Yih is 1.29 times more volatile than Datavan International. It trades about 0.11 of its potential returns per unit of risk. Datavan International is currently generating about -0.18 per unit of risk. If you would invest  3,610  in Shieh Yih Machinery on December 5, 2024 and sell it today you would earn a total of  495.00  from holding Shieh Yih Machinery or generate 13.71% return on investment over 90 days.

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

Shieh Yih Machinery  vs.  Datavan International

Shieh Yih Machinery

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shieh Yih Machinery are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Shieh Yih showed solid returns over the last few months and may actually be approaching a breakup point.

Datavan International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Datavan International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Shieh Yih and Datavan International

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

The idea behind Shieh Yih Machinery and Datavan International 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.