Correlation Between Shin Tai and Uni President
Can any of the company-specific risk be diversified away by investing in both Shin Tai and Uni President 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 Tai and Uni President into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Tai Industry and Uni President Enterprises Corp, you can compare the effects of market volatilities on Shin Tai and Uni President 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 Tai with a short position of Uni President. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Tai and Uni President.
Diversification Opportunities for Shin Tai and Uni President
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shin and Uni is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shin Tai Industry and Uni President Enterprises Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni President Enterp and Shin Tai 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 Tai Industry are associated (or correlated) with Uni President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni President Enterp has no effect on the direction of Shin Tai i.e., Shin Tai and Uni President go up and down completely randomly.
Pair Corralation between Shin Tai and Uni President
Assuming the 90 days trading horizon Shin Tai Industry is expected to under-perform the Uni President. In addition to that, Shin Tai is 1.69 times more volatile than Uni President Enterprises Corp. It trades about -0.15 of its total potential returns per unit of risk. Uni President Enterprises Corp is currently generating about -0.25 per unit of volatility. If you would invest 8,970 in Uni President Enterprises Corp on September 1, 2024 and sell it today you would lose (520.00) from holding Uni President Enterprises Corp or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Tai Industry vs. Uni President Enterprises Corp
Performance |
| Timeline |
| Shin Tai Industry |
| Uni President Enterp |
Shin Tai and Uni President Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Tai and Uni President
The main advantage of trading using opposite Shin Tai and Uni President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Tai position performs unexpectedly, Uni President 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 Uni President will offset losses from the drop in Uni President's long position.| Shin Tai vs. De Licacy Industrial | Shin Tai vs. Wisher Industrial Co | Shin Tai vs. Tainan Enterprises Co |
| Uni President vs. De Licacy Industrial | Uni President vs. Wisher Industrial Co | Uni President vs. Tainan Enterprises 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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