Correlation Between Shin Ruenn and Shinkong Insurance

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

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

Diversification Opportunities for Shin Ruenn and Shinkong Insurance

-0.57

Correlation Coefficient

Shin Ruenn  Shinkong Insurance

Excellent diversification

The 3 months correlation between Shin and Shinkong is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Shin Ruenn Development and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and Shin Ruenn 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 Shin Ruenn Development 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 Shin Ruenn i.e., Shin Ruenn and Shinkong Insurance go up and down completely randomly.

Pair Corralation between Shin Ruenn and Shinkong Insurance

Assuming the 90 days trading horizon Shin Ruenn Development is expected to under-perform the Shinkong Insurance. In addition to that, Shin Ruenn is 1.77 times more volatile than Shinkong Insurance Co. It trades about -0.08 of its total potential returns per unit of risk. Shinkong Insurance Co is currently generating about 0.15 per unit of volatility. If you would invest  9,450  in Shinkong Insurance Co on September 25, 2024 and sell it today you would earn a total of  1,150  from holding Shinkong Insurance Co or generate 12.17% return on investment over 90 days.

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

Shin Ruenn Development  vs.  Shinkong Insurance Co

Shin Ruenn Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shin Ruenn Development 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

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shinkong Insurance Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Shinkong Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Shin Ruenn and Shinkong Insurance

The main advantage of trading using opposite Shin Ruenn and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Ruenn 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 Shin Ruenn Development 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.