Correlation Between Shinkong Insurance and Mayer Steel
Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Mayer Steel 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 Mayer Steel 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 Mayer Steel Pipe, you can compare the effects of market volatilities on Shinkong Insurance and Mayer Steel 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 Mayer Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Mayer Steel.
Diversification Opportunities for Shinkong Insurance and Mayer Steel
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinkong and Mayer is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Mayer Steel Pipe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayer Steel Pipe 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 Mayer Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayer Steel Pipe has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Mayer Steel go up and down completely randomly.
Pair Corralation between Shinkong Insurance and Mayer Steel
Assuming the 90 days trading horizon Shinkong Insurance is expected to generate 3.43 times less return on investment than Mayer Steel. In addition to that, Shinkong Insurance is 1.15 times more volatile than Mayer Steel Pipe. It trades about 0.09 of its total potential returns per unit of risk. Mayer Steel Pipe is currently generating about 0.34 per unit of volatility. If you would invest 2,750 in Mayer Steel Pipe on September 1, 2024 and sell it today you would earn a total of 185.00 from holding Mayer Steel Pipe or generate 6.73% 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. Mayer Steel Pipe
Performance |
| Timeline |
| Shinkong Insurance |
| Mayer Steel Pipe |
Shinkong Insurance and Mayer Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Insurance and Mayer Steel
The main advantage of trading using opposite Shinkong Insurance and Mayer Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, Mayer Steel 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 Mayer Steel will offset losses from the drop in Mayer Steel's long position.| Shinkong Insurance vs. Central Reinsurance Corp | Shinkong Insurance vs. Huaku Development Co | Shinkong Insurance vs. Fubon Financial Holding |
| Mayer Steel vs. Basso Industry Corp | Mayer Steel vs. Chung Hsin Electric Machinery | Mayer Steel vs. TYC Brother Industrial | Mayer Steel vs. TECO Electric Machinery |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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