Correlation Between Shin Tai and Kedge Construction
Can any of the company-specific risk be diversified away by investing in both Shin Tai and Kedge Construction 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 Kedge Construction 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 Kedge Construction Co, you can compare the effects of market volatilities on Shin Tai and Kedge Construction 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 Kedge Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Tai and Kedge Construction.
Diversification Opportunities for Shin Tai and Kedge Construction
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shin and Kedge is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shin Tai Industry and Kedge Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedge Construction 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 Kedge Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedge Construction has no effect on the direction of Shin Tai i.e., Shin Tai and Kedge Construction go up and down completely randomly.
Pair Corralation between Shin Tai and Kedge Construction
Assuming the 90 days trading horizon Shin Tai Industry is expected to generate 0.86 times more return on investment than Kedge Construction. However, Shin Tai Industry is 1.16 times less risky than Kedge Construction. It trades about 0.13 of its potential returns per unit of risk. Kedge Construction Co is currently generating about 0.01 per unit of risk. If you would invest 8,060 in Shin Tai Industry on September 1, 2024 and sell it today you would earn a total of 6,590 from holding Shin Tai Industry or generate 81.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Tai Industry vs. Kedge Construction Co
Performance |
| Timeline |
| Shin Tai Industry |
| Kedge Construction |
Shin Tai and Kedge Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Tai and Kedge Construction
The main advantage of trading using opposite Shin Tai and Kedge Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Tai position performs unexpectedly, Kedge Construction 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 Kedge Construction will offset losses from the drop in Kedge Construction's long position.| Shin Tai vs. De Licacy Industrial | Shin Tai vs. Wisher Industrial Co | Shin Tai vs. Tainan Enterprises Co |
| Kedge Construction vs. BES Engineering Co | Kedge Construction vs. Continental Holdings Corp | Kedge Construction vs. Kee Tai Properties | Kedge Construction vs. Hung Sheng Construction |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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