Correlation Between Shan Loong and Axiomtek
Can any of the company-specific risk be diversified away by investing in both Shan Loong and Axiomtek 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 Shan Loong and Axiomtek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shan Loong Transportation Co and Axiomtek Co, you can compare the effects of market volatilities on Shan Loong and Axiomtek 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 Shan Loong with a short position of Axiomtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shan Loong and Axiomtek.
Diversification Opportunities for Shan Loong and Axiomtek
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shan and Axiomtek is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shan Loong Transportation Co and Axiomtek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiomtek and Shan Loong 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 Shan Loong Transportation Co are associated (or correlated) with Axiomtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiomtek has no effect on the direction of Shan Loong i.e., Shan Loong and Axiomtek go up and down completely randomly.
Pair Corralation between Shan Loong and Axiomtek
Assuming the 90 days trading horizon Shan Loong Transportation Co is expected to under-perform the Axiomtek. But the stock apears to be less risky and, when comparing its historical volatility, Shan Loong Transportation Co is 55.58 times less risky than Axiomtek. The stock trades about -0.12 of its potential returns per unit of risk. The Axiomtek Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,020 in Axiomtek Co on September 14, 2024 and sell it today you would earn a total of 5,880 from holding Axiomtek Co or generate 117.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shan Loong Transportation Co vs. Axiomtek Co
Performance |
| Timeline |
| Shan Loong Transport |
| Axiomtek |
Shan Loong and Axiomtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shan Loong and Axiomtek
The main advantage of trading using opposite Shan Loong and Axiomtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shan Loong position performs unexpectedly, Axiomtek 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 Axiomtek will offset losses from the drop in Axiomtek's long position.| Shan Loong vs. Kerry TJ Logistics | Shan Loong vs. China Container Terminal | Shan Loong vs. Eastern Media International | Shan Loong vs. Taiwan Navigation Co |
| Axiomtek vs. Chinese Maritime Transport | Axiomtek vs. Galaxy Software Services | Axiomtek vs. Shan Loong Transportation Co | Axiomtek vs. Sporton International |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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