Correlation Between Federal Corp and Shih Kuen
Can any of the company-specific risk be diversified away by investing in both Federal Corp 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 Federal Corp and Shih Kuen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Corp and Shih Kuen Plastics, you can compare the effects of market volatilities on Federal Corp 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 Federal Corp with a short position of Shih Kuen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Corp and Shih Kuen.
Diversification Opportunities for Federal Corp and Shih Kuen
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federal and Shih is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Federal Corp 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 Federal Corp 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 Federal Corp 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 Federal Corp i.e., Federal Corp and Shih Kuen go up and down completely randomly.
Pair Corralation between Federal Corp and Shih Kuen
Assuming the 90 days trading horizon Federal Corp is expected to under-perform the Shih Kuen. In addition to that, Federal Corp is 3.34 times more volatile than Shih Kuen Plastics. It trades about -0.04 of its total potential returns per unit of risk. Shih Kuen Plastics is currently generating about 0.28 per unit of volatility. If you would invest 4,190 in Shih Kuen Plastics on October 20, 2024 and sell it today you would earn a total of 120.00 from holding Shih Kuen Plastics or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federal Corp vs. Shih Kuen Plastics
Performance |
| Timeline |
| Federal Corp |
| Shih Kuen Plastics |
Federal Corp and Shih Kuen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Corp and Shih Kuen
The main advantage of trading using opposite Federal Corp and Shih Kuen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Corp 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.| Federal Corp vs. Carnival Industrial Corp | Federal Corp vs. De Licacy Industrial | Federal Corp vs. Tex Ray Industrial Co | Federal Corp vs. Reward Wool Industry |
| Shih Kuen vs. ANJI Technology Co | Shih Kuen vs. Orient Semiconductor Electronics | Shih Kuen vs. Simplo Technology Co | Shih Kuen vs. Holtek 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |