Correlation Between Sheng Yu and Chien Shing
Can any of the company-specific risk be diversified away by investing in both Sheng Yu and Chien Shing 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 Sheng Yu and Chien Shing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sheng Yu Steel and Chien Shing Stainless, you can compare the effects of market volatilities on Sheng Yu and Chien Shing 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 Sheng Yu with a short position of Chien Shing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sheng Yu and Chien Shing.
Diversification Opportunities for Sheng Yu and Chien Shing
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sheng and Chien is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sheng Yu Steel and Chien Shing Stainless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chien Shing Stainless and Sheng Yu 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 Sheng Yu Steel are associated (or correlated) with Chien Shing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chien Shing Stainless has no effect on the direction of Sheng Yu i.e., Sheng Yu and Chien Shing go up and down completely randomly.
Pair Corralation between Sheng Yu and Chien Shing
Assuming the 90 days trading horizon Sheng Yu Steel is expected to under-perform the Chien Shing. But the stock apears to be less risky and, when comparing its historical volatility, Sheng Yu Steel is 1.77 times less risky than Chien Shing. The stock trades about -0.28 of its potential returns per unit of risk. The Chien Shing Stainless is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,085 in Chien Shing Stainless on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Chien Shing Stainless or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sheng Yu Steel vs. Chien Shing Stainless
Performance |
| Timeline |
| Sheng Yu Steel |
| Chien Shing Stainless |
Sheng Yu and Chien Shing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sheng Yu and Chien Shing
The main advantage of trading using opposite Sheng Yu and Chien Shing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sheng Yu position performs unexpectedly, Chien Shing 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 Chien Shing will offset losses from the drop in Chien Shing's long position.| Sheng Yu vs. Yieh Phui Enterprise | Sheng Yu vs. Tung Ho Steel | Sheng Yu vs. Feng Hsin Steel | Sheng Yu vs. Chung Hung Steel |
| Chien Shing vs. Basso Industry Corp | Chien Shing vs. Chung Hsin Electric Machinery | Chien Shing vs. TYC Brother Industrial | Chien Shing 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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