Correlation Between San Shing and Brighton Best
Can any of the company-specific risk be diversified away by investing in both San Shing and Brighton Best 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 San Shing and Brighton Best into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Shing Fastech and Brighton Best International Taiwan, you can compare the effects of market volatilities on San Shing and Brighton Best 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 San Shing with a short position of Brighton Best. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Shing and Brighton Best.
Diversification Opportunities for San Shing and Brighton Best
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between San and Brighton is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding San Shing Fastech and Brighton Best International Ta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brighton Best Intern and San Shing 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 San Shing Fastech are associated (or correlated) with Brighton Best. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brighton Best Intern has no effect on the direction of San Shing i.e., San Shing and Brighton Best go up and down completely randomly.
Pair Corralation between San Shing and Brighton Best
Assuming the 90 days trading horizon San Shing Fastech is expected to under-perform the Brighton Best. But the stock apears to be less risky and, when comparing its historical volatility, San Shing Fastech is 2.23 times less risky than Brighton Best. The stock trades about -0.17 of its potential returns per unit of risk. The Brighton Best International Taiwan is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,400 in Brighton Best International Taiwan on September 22, 2024 and sell it today you would earn a total of 20.00 from holding Brighton Best International Taiwan or generate 0.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
San Shing Fastech vs. Brighton Best International Ta
Performance |
Timeline |
San Shing Fastech |
Brighton Best Intern |
San Shing and Brighton Best Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with San Shing and Brighton Best
The main advantage of trading using opposite San Shing and Brighton Best positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Shing position performs unexpectedly, Brighton Best 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 Brighton Best will offset losses from the drop in Brighton Best's long position.San Shing vs. Yang Ming Marine | San Shing vs. Evergreen Marine Corp | San Shing vs. Eva Airways Corp | San Shing vs. U Ming Marine Transport |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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