Correlation Between Century Iron and Shieh Yih
Can any of the company-specific risk be diversified away by investing in both Century Iron 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 Century Iron and Shieh Yih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Iron And and Shieh Yih Machinery, you can compare the effects of market volatilities on Century Iron 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 Century Iron with a short position of Shieh Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Iron and Shieh Yih.
Diversification Opportunities for Century Iron and Shieh Yih
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Shieh is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Century Iron And 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 Century Iron 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 Century Iron And 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 Century Iron i.e., Century Iron and Shieh Yih go up and down completely randomly.
Pair Corralation between Century Iron and Shieh Yih
Assuming the 90 days trading horizon Century Iron And is expected to under-perform the Shieh Yih. In addition to that, Century Iron is 1.31 times more volatile than Shieh Yih Machinery. It trades about -0.16 of its total potential returns per unit of risk. Shieh Yih Machinery is currently generating about -0.01 per unit of volatility. If you would invest 3,575 in Shieh Yih Machinery on October 10, 2024 and sell it today you would lose (40.00) from holding Shieh Yih Machinery or give up 1.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Century Iron And vs. Shieh Yih Machinery
Performance |
Timeline |
Century Iron And |
Shieh Yih Machinery |
Century Iron and Shieh Yih Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Century Iron and Shieh Yih
The main advantage of trading using opposite Century Iron and Shieh Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Iron 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.Century Iron vs. Basso Industry Corp | Century Iron vs. Chung Hsin Electric Machinery | Century Iron vs. TECO Electric Machinery |
Shieh Yih vs. Century Iron And | Shieh Yih vs. ECOVE Environment Corp | Shieh Yih vs. Farglory FTZ Investment | Shieh Yih vs. Cleanaway Co |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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