Correlation Between Catcher Technology and Shin Zu
Can any of the company-specific risk be diversified away by investing in both Catcher Technology and Shin Zu 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 Catcher Technology and Shin Zu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catcher Technology Co and Shin Zu Shing, you can compare the effects of market volatilities on Catcher Technology and Shin Zu 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 Catcher Technology with a short position of Shin Zu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catcher Technology and Shin Zu.
Diversification Opportunities for Catcher Technology and Shin Zu
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Catcher and Shin is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Catcher Technology Co and Shin Zu Shing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Zu Shing and Catcher Technology 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 Catcher Technology Co are associated (or correlated) with Shin Zu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Zu Shing has no effect on the direction of Catcher Technology i.e., Catcher Technology and Shin Zu go up and down completely randomly.
Pair Corralation between Catcher Technology and Shin Zu
Assuming the 90 days trading horizon Catcher Technology is expected to generate 3.99 times less return on investment than Shin Zu. But when comparing it to its historical volatility, Catcher Technology Co is 4.97 times less risky than Shin Zu. It trades about 0.24 of its potential returns per unit of risk. Shin Zu Shing is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 19,650 in Shin Zu Shing on November 4, 2024 and sell it today you would earn a total of 1,750 from holding Shin Zu Shing or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catcher Technology Co vs. Shin Zu Shing
Performance |
| Timeline |
| Catcher Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shin Zu Shing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Catcher Technology and Shin Zu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catcher Technology and Shin Zu
The main advantage of trading using opposite Catcher Technology and Shin Zu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catcher Technology position performs unexpectedly, Shin Zu 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 Shin Zu will offset losses from the drop in Shin Zu's long position.The idea behind Catcher Technology Co and Shin Zu Shing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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