Correlation Between Shinkong Synthetic and Far Eastern
Can any of the company-specific risk be diversified away by investing in both Shinkong Synthetic and Far Eastern 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 Shinkong Synthetic and Far Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinkong Synthetic Fiber and Far Eastern New, you can compare the effects of market volatilities on Shinkong Synthetic and Far Eastern 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 Shinkong Synthetic with a short position of Far Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Synthetic and Far Eastern.
Diversification Opportunities for Shinkong Synthetic and Far Eastern
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinkong and Far is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Synthetic Fiber and Far Eastern New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far Eastern New and Shinkong Synthetic 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 Shinkong Synthetic Fiber are associated (or correlated) with Far Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far Eastern New has no effect on the direction of Shinkong Synthetic i.e., Shinkong Synthetic and Far Eastern go up and down completely randomly.
Pair Corralation between Shinkong Synthetic and Far Eastern
Assuming the 90 days trading horizon Shinkong Synthetic Fiber is expected to generate 0.51 times more return on investment than Far Eastern. However, Shinkong Synthetic Fiber is 1.96 times less risky than Far Eastern. It trades about 0.18 of its potential returns per unit of risk. Far Eastern New is currently generating about -0.19 per unit of risk. If you would invest 1,530 in Shinkong Synthetic Fiber on August 31, 2024 and sell it today you would earn a total of 60.00 from holding Shinkong Synthetic Fiber or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinkong Synthetic Fiber vs. Far Eastern New
Performance |
| Timeline |
| Shinkong Synthetic Fiber |
| Far Eastern New |
Shinkong Synthetic and Far Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Synthetic and Far Eastern
The main advantage of trading using opposite Shinkong Synthetic and Far Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Synthetic position performs unexpectedly, Far Eastern 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 Far Eastern will offset losses from the drop in Far Eastern's long position.| Shinkong Synthetic vs. Basso Industry Corp | Shinkong Synthetic vs. Chung Hsin Electric Machinery | Shinkong Synthetic vs. TYC Brother Industrial | Shinkong Synthetic vs. TECO Electric Machinery |
| Far Eastern vs. BES Engineering Co | Far Eastern vs. Continental Holdings Corp | Far Eastern vs. Kee Tai Properties | Far Eastern vs. Hung Sheng Construction |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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