Correlation Between Shinkong Textile and TOPBI International
Can any of the company-specific risk be diversified away by investing in both Shinkong Textile and TOPBI 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 Shinkong Textile and TOPBI International 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 TOPBI International Holdings, you can compare the effects of market volatilities on Shinkong Textile and TOPBI 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 Shinkong Textile with a short position of TOPBI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Textile and TOPBI International.
Diversification Opportunities for Shinkong Textile and TOPBI International
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinkong and TOPBI is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Textile Co and TOPBI International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPBI International 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 TOPBI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPBI International has no effect on the direction of Shinkong Textile i.e., Shinkong Textile and TOPBI International go up and down completely randomly.
Pair Corralation between Shinkong Textile and TOPBI International
Assuming the 90 days trading horizon Shinkong Textile Co is expected to under-perform the TOPBI International. But the stock apears to be less risky and, when comparing its historical volatility, Shinkong Textile Co is 2.5 times less risky than TOPBI International. The stock trades about -0.01 of its potential returns per unit of risk. The TOPBI International Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,170 in TOPBI International Holdings on August 31, 2024 and sell it today you would earn a total of 200.00 from holding TOPBI International Holdings or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinkong Textile Co vs. TOPBI International Holdings
Performance |
| Timeline |
| Shinkong Textile |
| TOPBI International |
Shinkong Textile and TOPBI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Textile and TOPBI International
The main advantage of trading using opposite Shinkong Textile and TOPBI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Textile position performs unexpectedly, TOPBI 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 TOPBI International will offset losses from the drop in TOPBI International's long position.| Shinkong Textile vs. Shinkong Synthetic Fiber | Shinkong Textile vs. Formosa Taffeta Co | Shinkong Textile vs. Far Eastern New | Shinkong Textile vs. Tainan Spinning Co |
| TOPBI International vs. Ruentex Industries | TOPBI International vs. Grand Pacific Petrochemical | TOPBI International vs. Formosa International Hotels | TOPBI International vs. Jinli Group Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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