Correlation Between Shin Heung and Amogreentech
Can any of the company-specific risk be diversified away by investing in both Shin Heung and Amogreentech 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 Shin Heung and Amogreentech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Heung Energy and Amogreentech Co, you can compare the effects of market volatilities on Shin Heung and Amogreentech 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 Shin Heung with a short position of Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Heung and Amogreentech.
Diversification Opportunities for Shin Heung and Amogreentech
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shin and Amogreentech is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shin Heung Energy and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech and Shin Heung 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 Shin Heung Energy are associated (or correlated) with Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of Shin Heung i.e., Shin Heung and Amogreentech go up and down completely randomly.
Pair Corralation between Shin Heung and Amogreentech
Assuming the 90 days trading horizon Shin Heung Energy is expected to generate 0.78 times more return on investment than Amogreentech. However, Shin Heung Energy is 1.29 times less risky than Amogreentech. It trades about -0.03 of its potential returns per unit of risk. Amogreentech Co is currently generating about -0.04 per unit of risk. If you would invest 868,380 in Shin Heung Energy on September 12, 2024 and sell it today you would lose (360,380) from holding Shin Heung Energy or give up 41.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.51% |
| Values | Daily Returns |
Shin Heung Energy vs. Amogreentech Co
Performance |
| Timeline |
| Shin Heung Energy |
| Amogreentech |
Shin Heung and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Heung and Amogreentech
The main advantage of trading using opposite Shin Heung and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Heung position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech's long position.| Shin Heung vs. Ecopro BM Co | Shin Heung vs. Sangsin Energy Display | Shin Heung vs. Solution Advanced Technology | Shin Heung vs. Busan Industrial Co |
| Amogreentech vs. Ecopro BM Co | Amogreentech vs. Sangsin Energy Display | Amogreentech vs. Solution Advanced Technology | Amogreentech vs. Busan Industrial Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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