Correlation Between Shinkong Insurance and Wei Chuan
Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Wei Chuan 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 Shinkong Insurance and Wei Chuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinkong Insurance Co and Wei Chuan Foods, you can compare the effects of market volatilities on Shinkong Insurance and Wei Chuan 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 Shinkong Insurance with a short position of Wei Chuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Wei Chuan.
Diversification Opportunities for Shinkong Insurance and Wei Chuan
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinkong and Wei is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Wei Chuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wei Chuan Foods and Shinkong Insurance 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 Shinkong Insurance Co are associated (or correlated) with Wei Chuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wei Chuan Foods has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Wei Chuan go up and down completely randomly.
Pair Corralation between Shinkong Insurance and Wei Chuan
Assuming the 90 days trading horizon Shinkong Insurance Co is expected to under-perform the Wei Chuan. In addition to that, Shinkong Insurance is 1.98 times more volatile than Wei Chuan Foods. It trades about -0.11 of its total potential returns per unit of risk. Wei Chuan Foods is currently generating about 0.0 per unit of volatility. If you would invest 1,805 in Wei Chuan Foods on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Wei Chuan Foods or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinkong Insurance Co vs. Wei Chuan Foods
Performance |
| Timeline |
| Shinkong Insurance |
| Wei Chuan Foods |
Shinkong Insurance and Wei Chuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Insurance and Wei Chuan
The main advantage of trading using opposite Shinkong Insurance and Wei Chuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, Wei Chuan 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 Wei Chuan will offset losses from the drop in Wei Chuan's long position.| Shinkong Insurance vs. Central Reinsurance Corp | Shinkong Insurance vs. Huaku Development Co | Shinkong Insurance vs. Fubon Financial Holding | Shinkong Insurance vs. Chailease Holding Co |
| Wei Chuan vs. Uni President Enterprises Corp | Wei Chuan vs. Taisun Enterprise Co | Wei Chuan vs. AGV Products Corp | Wei Chuan vs. Great Wall Enterprise |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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