Correlation Between Shin Tai and Advanced International
Can any of the company-specific risk be diversified away by investing in both Shin Tai and Advanced International 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 Advanced International 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 Advanced International Multitech, you can compare the effects of market volatilities on Shin Tai and Advanced International 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 Advanced International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Tai and Advanced International.
Diversification Opportunities for Shin Tai and Advanced International
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shin and Advanced is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shin Tai Industry and Advanced International Multite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced International 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 Advanced International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced International has no effect on the direction of Shin Tai i.e., Shin Tai and Advanced International go up and down completely randomly.
Pair Corralation between Shin Tai and Advanced International
Assuming the 90 days trading horizon Shin Tai Industry is expected to under-perform the Advanced International. In addition to that, Shin Tai is 2.76 times more volatile than Advanced International Multitech. It trades about -0.19 of its total potential returns per unit of risk. Advanced International Multitech is currently generating about -0.37 per unit of volatility. If you would invest 7,910 in Advanced International Multitech on August 29, 2024 and sell it today you would lose (470.00) from holding Advanced International Multitech or give up 5.94% 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. Advanced International Multite
Performance |
| Timeline |
| Shin Tai Industry |
| Advanced International |
Shin Tai and Advanced International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Tai and Advanced International
The main advantage of trading using opposite Shin Tai and Advanced International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Tai position performs unexpectedly, Advanced International 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 Advanced International will offset losses from the drop in Advanced International's long position.| Shin Tai vs. Great Wall Enterprise | Shin Tai vs. Uni President Enterprises Corp | Shin Tai vs. Lien Hwa Industrial |
| Advanced International vs. Feng Tay Enterprises | Advanced International vs. Ruentex Materials Co | Advanced International vs. Symtek Automation Asia | Advanced International vs. CTCI 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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