Correlation Between StShine Optical and SS Healthcare
Can any of the company-specific risk be diversified away by investing in both StShine Optical and SS Healthcare 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 StShine Optical and SS Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StShine Optical Co and SS Healthcare Holding, you can compare the effects of market volatilities on StShine Optical and SS Healthcare 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 StShine Optical with a short position of SS Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of StShine Optical and SS Healthcare.
Diversification Opportunities for StShine Optical and SS Healthcare
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between StShine and 4198 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding StShine Optical Co and SS Healthcare Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS Healthcare Holding and StShine Optical 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 StShine Optical Co are associated (or correlated) with SS Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS Healthcare Holding has no effect on the direction of StShine Optical i.e., StShine Optical and SS Healthcare go up and down completely randomly.
Pair Corralation between StShine Optical and SS Healthcare
Assuming the 90 days trading horizon StShine Optical Co is expected to generate 0.75 times more return on investment than SS Healthcare. However, StShine Optical Co is 1.33 times less risky than SS Healthcare. It trades about 0.12 of its potential returns per unit of risk. SS Healthcare Holding is currently generating about -0.06 per unit of risk. If you would invest 21,250 in StShine Optical Co on August 30, 2024 and sell it today you would earn a total of 1,200 from holding StShine Optical Co or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
StShine Optical Co vs. SS Healthcare Holding
Performance |
| Timeline |
| StShine Optical |
| SS Healthcare Holding |
StShine Optical and SS Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StShine Optical and SS Healthcare
The main advantage of trading using opposite StShine Optical and SS Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StShine Optical position performs unexpectedly, SS Healthcare 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 SS Healthcare will offset losses from the drop in SS Healthcare's long position.| StShine Optical vs. Sinphar Pharmaceutical Co | StShine Optical vs. Grape King Bio | StShine Optical vs. Apex Biotechnology Corp | StShine Optical vs. Leatec Fine Ceramics |
| SS Healthcare vs. Coxon Precise Industrial | SS Healthcare vs. Tradetool Auto Co | SS Healthcare vs. Chain Chon Industrial | SS Healthcare vs. Trade Van Information Services |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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