Correlation Between Shin Foong and LIWANLI Innovation

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

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

Diversification Opportunities for Shin Foong and LIWANLI Innovation

0.74

Correlation Coefficient

Shin Foong  LIWANLI Innovation

Poor diversification

The 3 months correlation between Shin and LIWANLI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Shin Foong Specialty and LIWANLI Innovation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIWANLI Innovation and Shin Foong 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 Foong Specialty are associated (or correlated) with LIWANLI Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIWANLI Innovation has no effect on the direction of Shin Foong i.e., Shin Foong and LIWANLI Innovation go up and down completely randomly.

Pair Corralation between Shin Foong and LIWANLI Innovation

Assuming the 90 days trading horizon Shin Foong Specialty is expected to under-perform the LIWANLI Innovation. But the stock apears to be less risky and, when comparing its historical volatility, Shin Foong Specialty is 1.27 times less risky than LIWANLI Innovation. The stock trades about -0.18 of its potential returns per unit of risk. The LIWANLI Innovation Co is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,455  in LIWANLI Innovation Co on December 21, 2024 and sell it today you would lose (255.00) from holding LIWANLI Innovation Co or give up 10.39% of portfolio value over 90 days.

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

Shin Foong Specialty  vs.  LIWANLI Innovation Co

Shin Foong Specialty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shin Foong Specialty 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.

LIWANLI Innovation

Risk-Adjusted Performance

Very Weak

Over the last 90 days LIWANLI Innovation Co 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.

Pair Trading with Shin Foong and LIWANLI Innovation

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

The idea behind Shin Foong Specialty and LIWANLI Innovation 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.