Correlation Between Kee Tai and Shin Zu
Can any of the company-specific risk be diversified away by investing in both Kee Tai 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 Kee Tai and Shin Zu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kee Tai Properties and Shin Zu Shing, you can compare the effects of market volatilities on Kee Tai 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 Kee Tai with a short position of Shin Zu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kee Tai and Shin Zu.
Diversification Opportunities for Kee Tai and Shin Zu
Very good diversification
The 3 months correlation between Kee and Shin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kee Tai Properties 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 Kee Tai 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 Kee Tai Properties 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 Kee Tai i.e., Kee Tai and Shin Zu go up and down completely randomly.
Pair Corralation between Kee Tai and Shin Zu
Assuming the 90 days trading horizon Kee Tai is expected to generate 7.41 times less return on investment than Shin Zu. But when comparing it to its historical volatility, Kee Tai Properties is 3.38 times less risky than Shin Zu. It trades about 0.19 of its potential returns per unit of risk. Shin Zu Shing is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 21,750 in Shin Zu Shing on November 29, 2024 and sell it today you would earn a total of 6,900 from holding Shin Zu Shing or generate 31.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kee Tai Properties vs. Shin Zu Shing
Performance |
| Timeline |
| Kee Tai Properties |
| Shin Zu Shing |
Kee Tai and Shin Zu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kee Tai and Shin Zu
The main advantage of trading using opposite Kee Tai and Shin Zu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kee Tai 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.| Kee Tai vs. Hung Sheng Construction | Kee Tai vs. Chainqui Construction Development | Kee Tai vs. BES Engineering Co | Kee Tai vs. Long Bon International |
| Shin Zu vs. Catcher Technology Co | Shin Zu vs. Tripod Technology Corp | Shin Zu vs. Chicony Electronics Co | Shin Zu vs. Kinsus Interconnect Technology |
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.
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