Correlation Between Shan Loong and PChome Online
Can any of the company-specific risk be diversified away by investing in both Shan Loong and PChome Online 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 PChome Online 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 PChome Online, you can compare the effects of market volatilities on Shan Loong and PChome Online 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 PChome Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shan Loong and PChome Online.
Diversification Opportunities for Shan Loong and PChome Online
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shan and PChome is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shan Loong Transportation Co and PChome Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PChome Online 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 PChome Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PChome Online has no effect on the direction of Shan Loong i.e., Shan Loong and PChome Online go up and down completely randomly.
Pair Corralation between Shan Loong and PChome Online
Assuming the 90 days trading horizon Shan Loong Transportation Co is expected to under-perform the PChome Online. But the stock apears to be less risky and, when comparing its historical volatility, Shan Loong Transportation Co is 2.7 times less risky than PChome Online. The stock trades about -0.15 of its potential returns per unit of risk. The PChome Online is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,340 in PChome Online on September 1, 2024 and sell it today you would earn a total of 1,860 from holding PChome Online or generate 55.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shan Loong Transportation Co vs. PChome Online
Performance |
| Timeline |
| Shan Loong Transport |
| PChome Online |
Shan Loong and PChome Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shan Loong and PChome Online
The main advantage of trading using opposite Shan Loong and PChome Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shan Loong position performs unexpectedly, PChome Online 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 PChome Online will offset losses from the drop in PChome Online's long position.| Shan Loong vs. Chaintech Technology Corp | Shan Loong vs. AVerMedia Technologies | Shan Loong vs. Avision | Shan Loong vs. Clevo Co |
| PChome Online vs. momo Inc | PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Taiwan FamilyMart Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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