Correlation Between Shin Tai and Cyberlink
Can any of the company-specific risk be diversified away by investing in both Shin Tai and Cyberlink 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 Cyberlink 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 Cyberlink Co, you can compare the effects of market volatilities on Shin Tai and Cyberlink 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 Cyberlink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Tai and Cyberlink.
Diversification Opportunities for Shin Tai and Cyberlink
Excellent diversification
The 3 months correlation between Shin and Cyberlink is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shin Tai Industry and Cyberlink Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyberlink 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 Cyberlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyberlink has no effect on the direction of Shin Tai i.e., Shin Tai and Cyberlink go up and down completely randomly.
Pair Corralation between Shin Tai and Cyberlink
Assuming the 90 days trading horizon Shin Tai Industry is expected to under-perform the Cyberlink. In addition to that, Shin Tai is 1.67 times more volatile than Cyberlink Co. It trades about -0.05 of its total potential returns per unit of risk. Cyberlink Co is currently generating about 0.01 per unit of volatility. If you would invest 9,790 in Cyberlink Co on October 26, 2024 and sell it today you would lose (70.00) from holding Cyberlink Co or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Tai Industry vs. Cyberlink Co
Performance |
| Timeline |
| Shin Tai Industry |
| Cyberlink |
Shin Tai and Cyberlink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Tai and Cyberlink
The main advantage of trading using opposite Shin Tai and Cyberlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Tai position performs unexpectedly, Cyberlink 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 Cyberlink will offset losses from the drop in Cyberlink'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 |
| Cyberlink vs. Kinsus Interconnect Technology | Cyberlink vs. Topco Scientific Co | Cyberlink vs. Wistron Corp | Cyberlink vs. Elan Microelectronics Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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