Correlation Between Shin Tai and Fwusow Industry
Can any of the company-specific risk be diversified away by investing in both Shin Tai and Fwusow Industry 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 Fwusow Industry 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 Fwusow Industry Co, you can compare the effects of market volatilities on Shin Tai and Fwusow Industry 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 Fwusow Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Tai and Fwusow Industry.
Diversification Opportunities for Shin Tai and Fwusow Industry
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shin and Fwusow is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Shin Tai Industry and Fwusow Industry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fwusow Industry 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 Fwusow Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fwusow Industry has no effect on the direction of Shin Tai i.e., Shin Tai and Fwusow Industry go up and down completely randomly.
Pair Corralation between Shin Tai and Fwusow Industry
Assuming the 90 days trading horizon Shin Tai Industry is expected to generate 1.96 times more return on investment than Fwusow Industry. However, Shin Tai is 1.96 times more volatile than Fwusow Industry Co. It trades about 0.11 of its potential returns per unit of risk. Fwusow Industry Co is currently generating about -0.03 per unit of risk. If you would invest 6,810 in Shin Tai Industry on September 3, 2024 and sell it today you would earn a total of 7,890 from holding Shin Tai Industry or generate 115.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Tai Industry vs. Fwusow Industry Co
Performance |
| Timeline |
| Shin Tai Industry |
| Fwusow Industry |
Shin Tai and Fwusow Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Tai and Fwusow Industry
The main advantage of trading using opposite Shin Tai and Fwusow Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Tai position performs unexpectedly, Fwusow Industry 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 Fwusow Industry will offset losses from the drop in Fwusow Industry's long position.| Shin Tai vs. Fwusow Industry Co | Shin Tai vs. TTET Union Corp | Shin Tai vs. Lian Hwa Foods | Shin Tai vs. Formosa Oilseed Processing |
| Fwusow Industry vs. TTET Union Corp | Fwusow Industry vs. Uni President Enterprises Corp | Fwusow Industry 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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