Correlation Between Shin Tai and Hsinjing Holding
Can any of the company-specific risk be diversified away by investing in both Shin Tai and Hsinjing Holding 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 Hsinjing Holding 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 Hsinjing Holding Co, you can compare the effects of market volatilities on Shin Tai and Hsinjing Holding 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 Hsinjing Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Tai and Hsinjing Holding.
Diversification Opportunities for Shin Tai and Hsinjing Holding
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shin and Hsinjing is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shin Tai Industry and Hsinjing Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsinjing Holding 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 Hsinjing Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsinjing Holding has no effect on the direction of Shin Tai i.e., Shin Tai and Hsinjing Holding go up and down completely randomly.
Pair Corralation between Shin Tai and Hsinjing Holding
Assuming the 90 days trading horizon Shin Tai Industry is expected to under-perform the Hsinjing Holding. In addition to that, Shin Tai is 1.36 times more volatile than Hsinjing Holding Co. It trades about -0.19 of its total potential returns per unit of risk. Hsinjing Holding Co is currently generating about 0.02 per unit of volatility. If you would invest 2,305 in Hsinjing Holding Co on September 4, 2024 and sell it today you would earn a total of 10.00 from holding Hsinjing Holding Co or generate 0.43% 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. Hsinjing Holding Co
Performance |
| Timeline |
| Shin Tai Industry |
| Hsinjing Holding |
Shin Tai and Hsinjing Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Tai and Hsinjing Holding
The main advantage of trading using opposite Shin Tai and Hsinjing Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Tai position performs unexpectedly, Hsinjing Holding 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 Hsinjing Holding will offset losses from the drop in Hsinjing Holding'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 |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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