Correlation Between Zig Sheng and Shinkong Synthetic
Can any of the company-specific risk be diversified away by investing in both Zig Sheng and Shinkong Synthetic 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 Zig Sheng and Shinkong Synthetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zig Sheng Industrial and Shinkong Synthetic Fiber, you can compare the effects of market volatilities on Zig Sheng and Shinkong Synthetic 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 Zig Sheng with a short position of Shinkong Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zig Sheng and Shinkong Synthetic.
Diversification Opportunities for Zig Sheng and Shinkong Synthetic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zig and Shinkong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Zig Sheng Industrial and Shinkong Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Synthetic Fiber and Zig Sheng 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 Zig Sheng Industrial are associated (or correlated) with Shinkong Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Synthetic Fiber has no effect on the direction of Zig Sheng i.e., Zig Sheng and Shinkong Synthetic go up and down completely randomly.
Pair Corralation between Zig Sheng and Shinkong Synthetic
Assuming the 90 days trading horizon Zig Sheng Industrial is expected to under-perform the Shinkong Synthetic. In addition to that, Zig Sheng is 1.01 times more volatile than Shinkong Synthetic Fiber. It trades about -0.13 of its total potential returns per unit of risk. Shinkong Synthetic Fiber is currently generating about 0.13 per unit of volatility. If you would invest 1,555 in Shinkong Synthetic Fiber on August 29, 2024 and sell it today you would earn a total of 45.00 from holding Shinkong Synthetic Fiber or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zig Sheng Industrial vs. Shinkong Synthetic Fiber
Performance |
| Timeline |
| Zig Sheng Industrial |
| Shinkong Synthetic Fiber |
Zig Sheng and Shinkong Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zig Sheng and Shinkong Synthetic
The main advantage of trading using opposite Zig Sheng and Shinkong Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zig Sheng position performs unexpectedly, Shinkong Synthetic 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 Shinkong Synthetic will offset losses from the drop in Shinkong Synthetic's long position.| Zig Sheng vs. Yulon Finance Corp | Zig Sheng vs. Taiwan Secom Co | Zig Sheng vs. Pou Chen Corp | Zig Sheng vs. Great Wall Enterprise |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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