Correlation Between Shinkong Insurance and Wah Lee
Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Wah Lee 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 Wah Lee 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 Wah Lee Industrial, you can compare the effects of market volatilities on Shinkong Insurance and Wah Lee 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 Wah Lee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Wah Lee.
Diversification Opportunities for Shinkong Insurance and Wah Lee
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinkong and Wah is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Wah Lee Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Lee Industrial 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 Wah Lee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Lee Industrial has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Wah Lee go up and down completely randomly.
Pair Corralation between Shinkong Insurance and Wah Lee
Assuming the 90 days trading horizon Shinkong Insurance Co is expected to generate 0.55 times more return on investment than Wah Lee. However, Shinkong Insurance Co is 1.82 times less risky than Wah Lee. It trades about 0.05 of its potential returns per unit of risk. Wah Lee Industrial is currently generating about 0.01 per unit of risk. If you would invest 9,940 in Shinkong Insurance Co on August 29, 2024 and sell it today you would earn a total of 110.00 from holding Shinkong Insurance Co or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinkong Insurance Co vs. Wah Lee Industrial
Performance |
| Timeline |
| Shinkong Insurance |
| Wah Lee Industrial |
Shinkong Insurance and Wah Lee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Insurance and Wah Lee
The main advantage of trading using opposite Shinkong Insurance and Wah Lee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, Wah Lee 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 Wah Lee will offset losses from the drop in Wah Lee's long position.| Shinkong Insurance vs. Taiwan Secom Co | Shinkong Insurance vs. TTET Union Corp | Shinkong Insurance vs. China Steel Chemical | Shinkong Insurance vs. Taiwan Shin Kong |
| Wah Lee vs. Huaku Development Co | Wah Lee vs. Topco Scientific Co | Wah Lee vs. Test Research | Wah Lee vs. Shinkong Insurance 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |