Correlation Between Sun Sea and Shieh Yih

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Can any of the company-specific risk be diversified away by investing in both Sun Sea and Shieh Yih 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 Sun Sea and Shieh Yih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Sea Construction and Shieh Yih Machinery, you can compare the effects of market volatilities on Sun Sea and Shieh Yih 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 Sun Sea with a short position of Shieh Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Sea and Shieh Yih.

Diversification Opportunities for Sun Sea and Shieh Yih

SunShiehDiversified AwaySunShiehDiversified Away100%
-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sun and Shieh is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sun Sea Construction and Shieh Yih Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shieh Yih Machinery and Sun Sea 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 Sun Sea Construction are associated (or correlated) with Shieh Yih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shieh Yih Machinery has no effect on the direction of Sun Sea i.e., Sun Sea and Shieh Yih go up and down completely randomly.

Pair Corralation between Sun Sea and Shieh Yih

Assuming the 90 days trading horizon Sun Sea is expected to generate 32.81 times less return on investment than Shieh Yih. But when comparing it to its historical volatility, Sun Sea Construction is 1.47 times less risky than Shieh Yih. It trades about 0.0 of its potential returns per unit of risk. Shieh Yih Machinery is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,580  in Shieh Yih Machinery on November 30, 2024 and sell it today you would earn a total of  460.00  from holding Shieh Yih Machinery or generate 12.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Sun Sea Construction  vs.  Shieh Yih Machinery

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-505
JavaScript chart by amCharts 3.21.155516 4533
       Timeline  
Sun Sea Construction 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Sun Sea Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sun Sea is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb17.51818.51919.5
Shieh Yih Machinery 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb323436384042

Sun Sea and Shieh Yih Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.03-3.77-2.5-1.240.021.272.543.815.08 0.050.100.15
JavaScript chart by amCharts 3.21.155516 4533
       Returns  

Pair Trading with Sun Sea and Shieh Yih

The main advantage of trading using opposite Sun Sea and Shieh Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Sea position performs unexpectedly, Shieh Yih 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 Shieh Yih will offset losses from the drop in Shieh Yih's long position.
The idea behind Sun Sea Construction and Shieh Yih Machinery 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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