Correlation Between De Licacy and Shin Tai
Can any of the company-specific risk be diversified away by investing in both De Licacy and Shin Tai 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 De Licacy and Shin Tai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Licacy Industrial and Shin Tai Industry, you can compare the effects of market volatilities on De Licacy and Shin Tai 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 De Licacy with a short position of Shin Tai. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Licacy and Shin Tai.
Diversification Opportunities for De Licacy and Shin Tai
Very poor diversification
The 3 months correlation between 1464 and Shin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding De Licacy Industrial and Shin Tai Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Tai Industry and De Licacy 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 De Licacy Industrial are associated (or correlated) with Shin Tai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Tai Industry has no effect on the direction of De Licacy i.e., De Licacy and Shin Tai go up and down completely randomly.
Pair Corralation between De Licacy and Shin Tai
Assuming the 90 days trading horizon De Licacy Industrial is expected to under-perform the Shin Tai. In addition to that, De Licacy is 1.6 times more volatile than Shin Tai Industry. It trades about -0.09 of its total potential returns per unit of risk. Shin Tai Industry is currently generating about -0.15 per unit of volatility. If you would invest 15,600 in Shin Tai Industry on August 31, 2024 and sell it today you would lose (950.00) from holding Shin Tai Industry or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
De Licacy Industrial vs. Shin Tai Industry
Performance |
| Timeline |
| De Licacy Industrial |
| Shin Tai Industry |
De Licacy and Shin Tai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Licacy and Shin Tai
The main advantage of trading using opposite De Licacy and Shin Tai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Licacy position performs unexpectedly, Shin Tai 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 Shin Tai will offset losses from the drop in Shin Tai's long position.| 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 |
| Shin Tai vs. Taisun Enterprise Co | Shin Tai vs. De Licacy Industrial | Shin Tai vs. Wisher Industrial Co | Shin Tai vs. Tainan Enterprises 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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