Correlation Between Fwusow Industry and Shin Tai
Can any of the company-specific risk be diversified away by investing in both Fwusow Industry and Shin Tai 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 Fwusow Industry and Shin Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fwusow Industry Co and Shin Tai Industry, you can compare the effects of market volatilities on Fwusow Industry and Shin Tai 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 Fwusow Industry with a short position of Shin Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fwusow Industry and Shin Tai.
Diversification Opportunities for Fwusow Industry and Shin Tai
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fwusow and Shin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fwusow Industry Co and Shin Tai Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Tai Industry and Fwusow Industry 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 Fwusow Industry Co are associated (or correlated) with Shin Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Tai Industry has no effect on the direction of Fwusow Industry i.e., Fwusow Industry and Shin Tai go up and down completely randomly.
Pair Corralation between Fwusow Industry and Shin Tai
Assuming the 90 days trading horizon Fwusow Industry Co is expected to under-perform the Shin Tai. But the stock apears to be less risky and, when comparing its historical volatility, Fwusow Industry Co is 3.24 times less risky than Shin Tai. The stock trades about -0.14 of its potential returns per unit of risk. The Shin Tai Industry is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,740 in Shin Tai Industry on October 21, 2024 and sell it today you would lose (1,040) from holding Shin Tai Industry or give up 11.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fwusow Industry Co vs. Shin Tai Industry
Performance |
| Timeline |
| Fwusow Industry |
| Shin Tai Industry |
Fwusow Industry and Shin Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fwusow Industry and Shin Tai
The main advantage of trading using opposite Fwusow Industry and Shin Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fwusow Industry position performs unexpectedly, Shin Tai 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 Tai will offset losses from the drop in Shin Tai's long position.| Fwusow Industry vs. Great Wall Enterprise | Fwusow Industry vs. Charoen Pokphand Enterprise | Fwusow Industry vs. Taisun Enterprise Co | Fwusow Industry vs. Lian Hwa Foods |
| Shin Tai vs. Fwusow Industry Co | Shin Tai vs. TTET Union Corp | Shin Tai vs. Lian Hwa Foods | Shin Tai vs. Formosa Oilseed Processing |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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