Correlation Between Onano Industrial and Shin Kong

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

By analyzing existing cross correlation between Onano Industrial Corp and Shin Kong Financial, you can compare the effects of market volatilities on Onano Industrial and Shin Kong 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 Onano Industrial with a short position of Shin Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onano Industrial and Shin Kong.

Diversification Opportunities for Onano Industrial and Shin Kong

-0.66

Correlation Coefficient

Onano Industrial  Shin Kong

Excellent diversification

The 3 months correlation between Onano and Shin is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Onano Industrial Corp and Shin Kong Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Kong Financial and Onano Industrial 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 Onano Industrial Corp are associated (or correlated) with Shin Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Kong Financial has no effect on the direction of Onano Industrial i.e., Onano Industrial and Shin Kong go up and down completely randomly.

Pair Corralation between Onano Industrial and Shin Kong

Assuming the 90 days trading horizon Onano Industrial Corp is expected to under-perform the Shin Kong. In addition to that, Onano Industrial is 3.05 times more volatile than Shin Kong Financial. It trades about -0.45 of its total potential returns per unit of risk. Shin Kong Financial is currently generating about 0.05 per unit of volatility. If you would invest  1,175  in Shin Kong Financial on September 26, 2024 and sell it today you would earn a total of  10.00  from holding Shin Kong Financial or generate 0.85% return on investment over 90 days.

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

Onano Industrial Corp  vs.  Shin Kong Financial

Onano Industrial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onano Industrial Corp 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Shin Kong Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shin Kong Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Shin Kong is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Onano Industrial and Shin Kong

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

The idea behind Onano Industrial Corp and Shin Kong Financial 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.