Correlation Between Shinkong Insurance and Roo Hsing
Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Roo Hsing 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 Roo Hsing 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 Roo Hsing Co, you can compare the effects of market volatilities on Shinkong Insurance and Roo Hsing 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 Roo Hsing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Roo Hsing.
Diversification Opportunities for Shinkong Insurance and Roo Hsing
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinkong and Roo is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Roo Hsing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roo Hsing 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 Roo Hsing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roo Hsing has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Roo Hsing go up and down completely randomly.
Pair Corralation between Shinkong Insurance and Roo Hsing
Assuming the 90 days trading horizon Shinkong Insurance Co is expected to generate 0.9 times more return on investment than Roo Hsing. However, Shinkong Insurance Co is 1.11 times less risky than Roo Hsing. It trades about 0.15 of its potential returns per unit of risk. Roo Hsing Co is currently generating about 0.03 per unit of risk. If you would invest 9,300 in Shinkong Insurance Co on September 12, 2024 and sell it today you would earn a total of 1,000.00 from holding Shinkong Insurance Co or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Shinkong Insurance Co vs. Roo Hsing Co
Performance |
| Timeline |
| Shinkong Insurance |
| Roo Hsing |
Shinkong Insurance and Roo Hsing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Insurance and Roo Hsing
The main advantage of trading using opposite Shinkong Insurance and Roo Hsing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, Roo Hsing 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 Roo Hsing will offset losses from the drop in Roo Hsing'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 |
| Roo Hsing vs. Chia Yi Steel | Roo Hsing vs. Powertech Industrial Co | Roo Hsing vs. Sunspring Metal Corp | Roo Hsing vs. Mayer Steel Pipe |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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