Correlation Between Shiny Chemical and Shih Kuen
Can any of the company-specific risk be diversified away by investing in both Shiny Chemical and Shih Kuen 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 Shiny Chemical and Shih Kuen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shiny Chemical Industrial and Shih Kuen Plastics, you can compare the effects of market volatilities on Shiny Chemical and Shih Kuen 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 Shiny Chemical with a short position of Shih Kuen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shiny Chemical and Shih Kuen.
Diversification Opportunities for Shiny Chemical and Shih Kuen
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shiny and Shih is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shiny Chemical Industrial and Shih Kuen Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shih Kuen Plastics and Shiny Chemical 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 Shiny Chemical Industrial are associated (or correlated) with Shih Kuen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shih Kuen Plastics has no effect on the direction of Shiny Chemical i.e., Shiny Chemical and Shih Kuen go up and down completely randomly.
Pair Corralation between Shiny Chemical and Shih Kuen
Assuming the 90 days trading horizon Shiny Chemical Industrial is expected to under-perform the Shih Kuen. In addition to that, Shiny Chemical is 1.39 times more volatile than Shih Kuen Plastics. It trades about -0.17 of its total potential returns per unit of risk. Shih Kuen Plastics is currently generating about -0.19 per unit of volatility. If you would invest 4,590 in Shih Kuen Plastics on August 26, 2024 and sell it today you would lose (240.00) from holding Shih Kuen Plastics or give up 5.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shiny Chemical Industrial vs. Shih Kuen Plastics
Performance |
| Timeline |
| Shiny Chemical Industrial |
| Shih Kuen Plastics |
Shiny Chemical and Shih Kuen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shiny Chemical and Shih Kuen
The main advantage of trading using opposite Shiny Chemical and Shih Kuen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shiny Chemical position performs unexpectedly, Shih Kuen 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 Shih Kuen will offset losses from the drop in Shih Kuen's long position.| Shiny Chemical vs. Cheng Shin Rubber | Shiny Chemical vs. Taiwan Cement Corp | Shiny Chemical vs. China Steel Chemical | Shiny Chemical vs. Yulon Motor Co |
| Shih Kuen vs. SS Healthcare Holding | Shih Kuen vs. Power Wind Health | Shih Kuen vs. Pacific Hospital Supply | Shih Kuen vs. Davicom Semiconductor |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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