Correlation Between China Steel and I Sheng
Can any of the company-specific risk be diversified away by investing in both China Steel and I Sheng 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 China Steel and I Sheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Steel Corp and I Sheng Electric Wire, you can compare the effects of market volatilities on China Steel and I Sheng 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 China Steel with a short position of I Sheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Steel and I Sheng.
Diversification Opportunities for China Steel and I Sheng
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and 6115 is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Steel Corp and I Sheng Electric Wire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Sheng Electric and China Steel 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 China Steel Corp are associated (or correlated) with I Sheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Sheng Electric has no effect on the direction of China Steel i.e., China Steel and I Sheng go up and down completely randomly.
Pair Corralation between China Steel and I Sheng
Assuming the 90 days trading horizon China Steel Corp is expected to under-perform the I Sheng. In addition to that, China Steel is 2.14 times more volatile than I Sheng Electric Wire. It trades about -0.24 of its total potential returns per unit of risk. I Sheng Electric Wire is currently generating about 0.0 per unit of volatility. If you would invest 5,250 in I Sheng Electric Wire on September 2, 2024 and sell it today you would earn a total of 0.00 from holding I Sheng Electric Wire or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Steel Corp vs. I Sheng Electric Wire
Performance |
| Timeline |
| China Steel Corp |
| I Sheng Electric |
China Steel and I Sheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Steel and I Sheng
The main advantage of trading using opposite China Steel and I Sheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Steel position performs unexpectedly, I Sheng 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 I Sheng will offset losses from the drop in I Sheng's long position.| China Steel vs. Formosa Plastics Corp | China Steel vs. Chunghwa Telecom Co | China Steel vs. Nan Ya Plastics | China Steel vs. Cathay Financial Holding |
| I Sheng vs. Unitech Computer Co | I Sheng vs. Far EasTone Telecommunications | I Sheng vs. Tai Tung Communication | I Sheng vs. Arima Communications Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |