Correlation Between Zig Sheng and Yi Jinn
Can any of the company-specific risk be diversified away by investing in both Zig Sheng and Yi Jinn 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 Yi Jinn 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 Yi Jinn Industrial, you can compare the effects of market volatilities on Zig Sheng and Yi Jinn 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 Yi Jinn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zig Sheng and Yi Jinn.
Diversification Opportunities for Zig Sheng and Yi Jinn
Poor diversification
The 3 months correlation between Zig and 1457 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Zig Sheng Industrial and Yi Jinn Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yi Jinn Industrial 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 Yi Jinn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yi Jinn Industrial has no effect on the direction of Zig Sheng i.e., Zig Sheng and Yi Jinn go up and down completely randomly.
Pair Corralation between Zig Sheng and Yi Jinn
Assuming the 90 days trading horizon Zig Sheng Industrial is expected to under-perform the Yi Jinn. In addition to that, Zig Sheng is 1.26 times more volatile than Yi Jinn Industrial. It trades about -0.14 of its total potential returns per unit of risk. Yi Jinn Industrial is currently generating about 0.07 per unit of volatility. If you would invest 1,945 in Yi Jinn Industrial on September 4, 2024 and sell it today you would earn a total of 20.00 from holding Yi Jinn Industrial or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zig Sheng Industrial vs. Yi Jinn Industrial
Performance |
| Timeline |
| Zig Sheng Industrial |
| Yi Jinn Industrial |
Zig Sheng and Yi Jinn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zig Sheng and Yi Jinn
The main advantage of trading using opposite Zig Sheng and Yi Jinn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zig Sheng position performs unexpectedly, Yi Jinn 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 Yi Jinn will offset losses from the drop in Yi Jinn's long position.| Zig Sheng vs. Tainan Spinning Co | Zig Sheng vs. Chia Her Industrial | Zig Sheng vs. WiseChip Semiconductor | Zig Sheng vs. Novatek Microelectronics Corp |
| Yi Jinn vs. Tainan Spinning Co | Yi Jinn vs. Chia Her Industrial | Yi Jinn vs. WiseChip Semiconductor | Yi Jinn 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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