Correlation Between Standard Foods and Shin Shin
Can any of the company-specific risk be diversified away by investing in both Standard Foods and Shin Shin 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 Standard Foods and Shin Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Foods Corp and Shin Shin Co, you can compare the effects of market volatilities on Standard Foods and Shin Shin 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 Standard Foods with a short position of Shin Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Foods and Shin Shin.
Diversification Opportunities for Standard Foods and Shin Shin
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Standard and Shin is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Standard Foods Corp and Shin Shin Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Shin and Standard Foods 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 Standard Foods Corp are associated (or correlated) with Shin Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Shin has no effect on the direction of Standard Foods i.e., Standard Foods and Shin Shin go up and down completely randomly.
Pair Corralation between Standard Foods and Shin Shin
Assuming the 90 days trading horizon Standard Foods Corp is expected to under-perform the Shin Shin. But the stock apears to be less risky and, when comparing its historical volatility, Standard Foods Corp is 1.02 times less risky than Shin Shin. The stock trades about -0.01 of its potential returns per unit of risk. The Shin Shin Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,860 in Shin Shin Co on September 3, 2024 and sell it today you would lose (85.00) from holding Shin Shin Co or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Foods Corp vs. Shin Shin Co
Performance |
| Timeline |
| Standard Foods Corp |
| Shin Shin |
Standard Foods and Shin Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Foods and Shin Shin
The main advantage of trading using opposite Standard Foods and Shin Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Foods position performs unexpectedly, Shin Shin 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 Shin will offset losses from the drop in Shin Shin's long position.| Standard Foods vs. TTET Union Corp | Standard Foods vs. Uni President Enterprises Corp | Standard Foods vs. Charoen Pokphand Enterprise |
| Shin Shin vs. Standard Foods Corp | Shin Shin vs. TTET Union Corp | Shin Shin vs. Uni President Enterprises Corp | Shin Shin vs. Charoen Pokphand Enterprise |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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