Correlation Between De Licacy and Shinkong Synthetic
Can any of the company-specific risk be diversified away by investing in both De Licacy 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 De Licacy and Shinkong Synthetic 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 Shinkong Synthetic Fiber, you can compare the effects of market volatilities on De Licacy 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 De Licacy with a short position of Shinkong Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Licacy and Shinkong Synthetic.
Diversification Opportunities for De Licacy and Shinkong Synthetic
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 1464 and Shinkong is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding De Licacy 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 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 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 De Licacy i.e., De Licacy and Shinkong Synthetic go up and down completely randomly.
Pair Corralation between De Licacy and Shinkong Synthetic
Assuming the 90 days trading horizon De Licacy is expected to generate 4.13 times less return on investment than Shinkong Synthetic. In addition to that, De Licacy is 3.11 times more volatile than Shinkong Synthetic Fiber. It trades about 0.01 of its total potential returns per unit of risk. Shinkong Synthetic Fiber is currently generating about 0.12 per unit of volatility. If you would invest 1,555 in Shinkong Synthetic Fiber on September 5, 2024 and sell it today you would earn a total of 40.00 from holding Shinkong Synthetic Fiber or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
De Licacy Industrial vs. Shinkong Synthetic Fiber
Performance |
| Timeline |
| De Licacy Industrial |
| Shinkong Synthetic Fiber |
De Licacy and Shinkong Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Licacy and Shinkong Synthetic
The main advantage of trading using opposite De Licacy and Shinkong Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Licacy 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.| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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