Correlation Between King Slide and Shihlin Electric
Can any of the company-specific risk be diversified away by investing in both King Slide and Shihlin Electric 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 King Slide and Shihlin Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between King Slide Works and Shihlin Electric Engineering, you can compare the effects of market volatilities on King Slide and Shihlin Electric 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 King Slide with a short position of Shihlin Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Slide and Shihlin Electric.
Diversification Opportunities for King Slide and Shihlin Electric
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between King and Shihlin is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding King Slide Works and Shihlin Electric Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shihlin Electric Eng and King Slide 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 King Slide Works are associated (or correlated) with Shihlin Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shihlin Electric Eng has no effect on the direction of King Slide i.e., King Slide and Shihlin Electric go up and down completely randomly.
Pair Corralation between King Slide and Shihlin Electric
Assuming the 90 days trading horizon King Slide Works is expected to generate 0.97 times more return on investment than Shihlin Electric. However, King Slide Works is 1.04 times less risky than Shihlin Electric. It trades about 0.08 of its potential returns per unit of risk. Shihlin Electric Engineering is currently generating about 0.06 per unit of risk. If you would invest 85,800 in King Slide Works on September 2, 2024 and sell it today you would earn a total of 60,200 from holding King Slide Works or generate 70.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
King Slide Works vs. Shihlin Electric Engineering
Performance |
| Timeline |
| King Slide Works |
| Shihlin Electric Eng |
King Slide and Shihlin Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Slide and Shihlin Electric
The main advantage of trading using opposite King Slide and Shihlin Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Slide position performs unexpectedly, Shihlin Electric 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 Shihlin Electric will offset losses from the drop in Shihlin Electric's long position.| King Slide vs. Eclat Textile Co | King Slide vs. Advantech Co | King Slide vs. Chicony Electronics Co | King Slide vs. Merida Industry Co |
| Shihlin Electric vs. TECO Electric Machinery | Shihlin Electric vs. Walsin Lihwa Corp | Shihlin Electric vs. Formosa Taffeta Co | Shihlin Electric vs. Far Eastern New |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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