Correlation Between Shin Tai and San Neng
Can any of the company-specific risk be diversified away by investing in both Shin Tai and San Neng 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 San Neng 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 San Neng Group, you can compare the effects of market volatilities on Shin Tai and San Neng 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 San Neng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Tai and San Neng.
Diversification Opportunities for Shin Tai and San Neng
Very good diversification
The 3 months correlation between Shin and San is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Shin Tai Industry and San Neng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Neng Group 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 San Neng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Neng Group has no effect on the direction of Shin Tai i.e., Shin Tai and San Neng go up and down completely randomly.
Pair Corralation between Shin Tai and San Neng
Assuming the 90 days trading horizon Shin Tai Industry is expected to under-perform the San Neng. In addition to that, Shin Tai is 3.75 times more volatile than San Neng Group. It trades about -0.15 of its total potential returns per unit of risk. San Neng Group is currently generating about -0.19 per unit of volatility. If you would invest 4,300 in San Neng Group on August 30, 2024 and sell it today you would lose (85.00) from holding San Neng Group or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Tai Industry vs. San Neng Group
Performance |
| Timeline |
| Shin Tai Industry |
| San Neng Group |
Shin Tai and San Neng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Tai and San Neng
The main advantage of trading using opposite Shin Tai and San Neng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Tai position performs unexpectedly, San Neng 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 San Neng will offset losses from the drop in San Neng'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 |
| San Neng vs. Taiyen Biotech Co | San Neng vs. Leatec Fine Ceramics | San Neng vs. Information Technology Total | San Neng vs. Kinko Optical Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
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