Correlation Between Shinkong Textile and De Licacy
Can any of the company-specific risk be diversified away by investing in both Shinkong Textile and De Licacy 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 Textile and De Licacy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinkong Textile Co and De Licacy Industrial, you can compare the effects of market volatilities on Shinkong Textile and De Licacy 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 Textile with a short position of De Licacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Textile and De Licacy.
Diversification Opportunities for Shinkong Textile and De Licacy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinkong and 1464 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Textile Co and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial and Shinkong Textile 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 Textile Co are associated (or correlated) with De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of Shinkong Textile i.e., Shinkong Textile and De Licacy go up and down completely randomly.
Pair Corralation between Shinkong Textile and De Licacy
Assuming the 90 days trading horizon Shinkong Textile is expected to generate 10.3 times less return on investment than De Licacy. But when comparing it to its historical volatility, Shinkong Textile Co is 2.35 times less risky than De Licacy. It trades about 0.0 of its potential returns per unit of risk. De Licacy Industrial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,620 in De Licacy Industrial on September 5, 2024 and sell it today you would lose (5.00) from holding De Licacy Industrial or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shinkong Textile Co vs. De Licacy Industrial
Performance |
| Timeline |
| Shinkong Textile |
| De Licacy Industrial |
Shinkong Textile and De Licacy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Textile and De Licacy
The main advantage of trading using opposite Shinkong Textile and De Licacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Textile position performs unexpectedly, De Licacy 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 De Licacy will offset losses from the drop in De Licacy's long position.| Shinkong Textile vs. Tainan Spinning Co | Shinkong Textile vs. Chia Her Industrial | Shinkong Textile vs. WiseChip Semiconductor | Shinkong Textile vs. Novatek Microelectronics Corp |
| De Licacy vs. Tainan Enterprises Co | De Licacy vs. Nien Hsing Textile | De Licacy vs. Wisher Industrial Co | De Licacy vs. Tex Ray Industrial 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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