Correlation Between Basso Industry and Sinkang Industries
Can any of the company-specific risk be diversified away by investing in both Basso Industry and Sinkang Industries 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 Basso Industry and Sinkang Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basso Industry Corp and Sinkang Industries Co, you can compare the effects of market volatilities on Basso Industry and Sinkang Industries 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 Basso Industry with a short position of Sinkang Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basso Industry and Sinkang Industries.
Diversification Opportunities for Basso Industry and Sinkang Industries
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Basso and Sinkang is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Basso Industry Corp and Sinkang Industries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinkang Industries and Basso Industry 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 Basso Industry Corp are associated (or correlated) with Sinkang Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinkang Industries has no effect on the direction of Basso Industry i.e., Basso Industry and Sinkang Industries go up and down completely randomly.
Pair Corralation between Basso Industry and Sinkang Industries
Assuming the 90 days trading horizon Basso Industry Corp is expected to generate 0.9 times more return on investment than Sinkang Industries. However, Basso Industry Corp is 1.11 times less risky than Sinkang Industries. It trades about -0.05 of its potential returns per unit of risk. Sinkang Industries Co is currently generating about -0.09 per unit of risk. If you would invest 4,330 in Basso Industry Corp on August 31, 2024 and sell it today you would lose (60.00) from holding Basso Industry Corp or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basso Industry Corp vs. Sinkang Industries Co
Performance |
| Timeline |
| Basso Industry Corp |
| Sinkang Industries |
Basso Industry and Sinkang Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basso Industry and Sinkang Industries
The main advantage of trading using opposite Basso Industry and Sinkang Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basso Industry position performs unexpectedly, Sinkang Industries 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 Sinkang Industries will offset losses from the drop in Sinkang Industries' long position.| Basso Industry vs. Cheng Shin Rubber | Basso Industry vs. Kung Long Batteries | Basso Industry vs. Pou Chen Corp | Basso Industry vs. China Steel Chemical |
| Sinkang Industries vs. Basso Industry Corp | Sinkang Industries vs. Chung Hsin Electric Machinery | Sinkang Industries vs. TYC Brother Industrial | Sinkang Industries vs. TECO Electric Machinery |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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