Correlation Between Shinkong Insurance and Central Reinsurance
Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Central Reinsurance 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 Central Reinsurance 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 Central Reinsurance Corp, you can compare the effects of market volatilities on Shinkong Insurance and Central Reinsurance 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 Central Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Central Reinsurance.
Diversification Opportunities for Shinkong Insurance and Central Reinsurance
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinkong and Central is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Central Reinsurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Reinsurance Corp 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 Central Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Reinsurance Corp has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Central Reinsurance go up and down completely randomly.
Pair Corralation between Shinkong Insurance and Central Reinsurance
Assuming the 90 days trading horizon Shinkong Insurance Co is expected to generate 2.34 times more return on investment than Central Reinsurance. However, Shinkong Insurance is 2.34 times more volatile than Central Reinsurance Corp. It trades about 0.05 of its potential returns per unit of risk. Central Reinsurance Corp is currently generating about -0.13 per unit of risk. If you would invest 10,150 in Shinkong Insurance Co on October 26, 2024 and sell it today you would earn a total of 250.00 from holding Shinkong Insurance Co or generate 2.46% 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. Central Reinsurance Corp
Performance |
| Timeline |
| Shinkong Insurance |
| Central Reinsurance Corp |
Shinkong Insurance and Central Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Insurance and Central Reinsurance
The main advantage of trading using opposite Shinkong Insurance and Central Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, Central Reinsurance 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 Central Reinsurance will offset losses from the drop in Central Reinsurance'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 |
| Central Reinsurance vs. First Insurance Co | Central Reinsurance vs. Mercuries Life Insurance | Central Reinsurance vs. Shinkong Insurance Co | Central Reinsurance vs. Yung Zip Chemical |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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