Correlation Between G Shank and Shihlin Electric
Can any of the company-specific risk be diversified away by investing in both G Shank 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 G Shank and Shihlin Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G Shank Enterprise Co and Shihlin Electric Engineering, you can compare the effects of market volatilities on G Shank 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 G Shank with a short position of Shihlin Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Shank and Shihlin Electric.
Diversification Opportunities for G Shank and Shihlin Electric
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2476 and Shihlin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding G Shank Enterprise Co 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 G Shank 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 G Shank Enterprise Co 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 G Shank i.e., G Shank and Shihlin Electric go up and down completely randomly.
Pair Corralation between G Shank and Shihlin Electric
Assuming the 90 days trading horizon G Shank is expected to generate 1.73 times less return on investment than Shihlin Electric. But when comparing it to its historical volatility, G Shank Enterprise Co is 1.45 times less risky than Shihlin Electric. It trades about 0.05 of its potential returns per unit of risk. Shihlin Electric Engineering is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 13,250 in Shihlin Electric Engineering on September 2, 2024 and sell it today you would earn a total of 6,600 from holding Shihlin Electric Engineering or generate 49.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G Shank Enterprise Co vs. Shihlin Electric Engineering
Performance |
| Timeline |
| G Shank Enterprise |
| Shihlin Electric Eng |
G Shank and Shihlin Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G Shank and Shihlin Electric
The main advantage of trading using opposite G Shank and Shihlin Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Shank 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.| G Shank vs. BES Engineering Co | G Shank vs. Continental Holdings Corp | G Shank vs. Kee Tai Properties | G Shank vs. Hung Sheng Construction |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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