Correlation Between Shinkong Synthetic and Adata Technology
Can any of the company-specific risk be diversified away by investing in both Shinkong Synthetic and Adata Technology 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 Adata Technology 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 Adata Technology Co, you can compare the effects of market volatilities on Shinkong Synthetic and Adata Technology 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 Adata Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Synthetic and Adata Technology.
Diversification Opportunities for Shinkong Synthetic and Adata Technology
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinkong and Adata is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Synthetic Fiber and Adata Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adata Technology 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 Adata Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adata Technology has no effect on the direction of Shinkong Synthetic i.e., Shinkong Synthetic and Adata Technology go up and down completely randomly.
Pair Corralation between Shinkong Synthetic and Adata Technology
Assuming the 90 days trading horizon Shinkong Synthetic Fiber is expected to generate 0.74 times more return on investment than Adata Technology. However, Shinkong Synthetic Fiber is 1.34 times less risky than Adata Technology. It trades about 0.16 of its potential returns per unit of risk. Adata Technology Co is currently generating about 0.05 per unit of risk. If you would invest 1,555 in Shinkong Synthetic Fiber on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Shinkong Synthetic Fiber or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinkong Synthetic Fiber vs. Adata Technology Co
Performance |
| Timeline |
| Shinkong Synthetic Fiber |
| Adata Technology |
Shinkong Synthetic and Adata Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Synthetic and Adata Technology
The main advantage of trading using opposite Shinkong Synthetic and Adata Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Synthetic position performs unexpectedly, Adata Technology 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 Adata Technology will offset losses from the drop in Adata Technology's long position.| Shinkong Synthetic vs. Tainan Spinning Co | Shinkong Synthetic vs. Lealea Enterprise Co | Shinkong Synthetic vs. China Petrochemical Development | Shinkong Synthetic vs. Taiwan Styrene Monomer |
| Adata Technology vs. Taiwan Semiconductor Manufacturing | Adata Technology vs. MediaTek | Adata Technology vs. United Microelectronics | Adata Technology vs. Novatek 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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