Correlation Between Shin Heung and Ecopro BM
Can any of the company-specific risk be diversified away by investing in both Shin Heung and Ecopro BM 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 Ecopro BM 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 Ecopro BM Co, you can compare the effects of market volatilities on Shin Heung and Ecopro BM 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 Ecopro BM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Heung and Ecopro BM.
Diversification Opportunities for Shin Heung and Ecopro BM
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shin and Ecopro is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shin Heung Energy and Ecopro BM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecopro BM 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 Ecopro BM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecopro BM has no effect on the direction of Shin Heung i.e., Shin Heung and Ecopro BM go up and down completely randomly.
Pair Corralation between Shin Heung and Ecopro BM
Assuming the 90 days trading horizon Shin Heung Energy is expected to under-perform the Ecopro BM. But the stock apears to be less risky and, when comparing its historical volatility, Shin Heung Energy is 1.3 times less risky than Ecopro BM. The stock trades about -0.35 of its potential returns per unit of risk. The Ecopro BM Co is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 17,200,000 in Ecopro BM Co on August 29, 2024 and sell it today you would lose (3,180,000) from holding Ecopro BM Co or give up 18.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Heung Energy vs. Ecopro BM Co
Performance |
| Timeline |
| Shin Heung Energy |
| Ecopro BM |
Shin Heung and Ecopro BM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Heung and Ecopro BM
The main advantage of trading using opposite Shin Heung and Ecopro BM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Heung position performs unexpectedly, Ecopro BM 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 Ecopro BM will offset losses from the drop in Ecopro BM's long position.| Shin Heung vs. Ecopro BM Co | Shin Heung vs. Sangsin Energy Display | Shin Heung vs. Bosung Power Technology | Shin Heung vs. APro 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |