Correlation Between Yang Ming and Shin Kong
Can any of the company-specific risk be diversified away by investing in both Yang Ming and Shin Kong 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 Yang Ming and Shin Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yang Ming Marine and Shin Kong Financial, you can compare the effects of market volatilities on Yang Ming and Shin Kong 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 Yang Ming with a short position of Shin Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yang Ming and Shin Kong.
Diversification Opportunities for Yang Ming and Shin Kong
Pay attention - limited upside
The 3 months correlation between Yang and Shin is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Yang Ming Marine and Shin Kong Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Kong Financial and Yang Ming 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 Yang Ming Marine are associated (or correlated) with Shin Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Kong Financial has no effect on the direction of Yang Ming i.e., Yang Ming and Shin Kong go up and down completely randomly.
Pair Corralation between Yang Ming and Shin Kong
Assuming the 90 days trading horizon Yang Ming Marine is expected to generate 12.64 times more return on investment than Shin Kong. However, Yang Ming is 12.64 times more volatile than Shin Kong Financial. It trades about 0.19 of its potential returns per unit of risk. Shin Kong Financial is currently generating about -0.13 per unit of risk. If you would invest 6,640 in Yang Ming Marine on September 1, 2024 and sell it today you would earn a total of 680.00 from holding Yang Ming Marine or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yang Ming Marine vs. Shin Kong Financial
Performance |
| Timeline |
| Yang Ming Marine |
| Shin Kong Financial |
Yang Ming and Shin Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yang Ming and Shin Kong
The main advantage of trading using opposite Yang Ming and Shin Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yang Ming position performs unexpectedly, Shin Kong 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 Kong will offset losses from the drop in Shin Kong's long position.| Yang Ming vs. Evergreen Marine Corp | Yang Ming vs. Wan Hai Lines | Yang Ming vs. China Airlines | Yang Ming vs. Eva Airways Corp |
| Shin Kong vs. Arbor Technology | Shin Kong vs. Oceanic Beverages Co | Shin Kong vs. Hi Lai Foods Co | Shin Kong vs. Lian Hwa Foods |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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