Correlation Between Shin Tai and Shin Ruenn
Can any of the company-specific risk be diversified away by investing in both Shin Tai and Shin Ruenn 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 Shin Ruenn 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 Shin Ruenn Development, you can compare the effects of market volatilities on Shin Tai and Shin Ruenn 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 Shin Ruenn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Tai and Shin Ruenn.
Diversification Opportunities for Shin Tai and Shin Ruenn
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shin and Shin is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shin Tai Industry and Shin Ruenn Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Ruenn Development 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 Shin Ruenn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Ruenn Development has no effect on the direction of Shin Tai i.e., Shin Tai and Shin Ruenn go up and down completely randomly.
Pair Corralation between Shin Tai and Shin Ruenn
Assuming the 90 days trading horizon Shin Tai Industry is expected to generate 0.76 times more return on investment than Shin Ruenn. However, Shin Tai Industry is 1.32 times less risky than Shin Ruenn. It trades about 0.1 of its potential returns per unit of risk. Shin Ruenn Development is currently generating about 0.07 per unit of risk. If you would invest 6,920 in Shin Tai Industry on September 2, 2024 and sell it today you would earn a total of 7,730 from holding Shin Tai Industry or generate 111.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Tai Industry vs. Shin Ruenn Development
Performance |
| Timeline |
| Shin Tai Industry |
| Shin Ruenn Development |
Shin Tai and Shin Ruenn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Tai and Shin Ruenn
The main advantage of trading using opposite Shin Tai and Shin Ruenn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Tai position performs unexpectedly, Shin Ruenn 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 Shin Ruenn will offset losses from the drop in Shin Ruenn'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 |
| Shin Ruenn vs. Hi Lai Foods Co | Shin Ruenn vs. Founding Construction Development | Shin Ruenn vs. Ruentex Engineering Construction | Shin Ruenn vs. Chung Hsin Electric Machinery |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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