Correlation Between Shinkong Insurance and Topco Scientific
Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Topco Scientific 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 Topco Scientific 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 Topco Scientific Co, you can compare the effects of market volatilities on Shinkong Insurance and Topco Scientific 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 Topco Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Topco Scientific.
Diversification Opportunities for Shinkong Insurance and Topco Scientific
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shinkong and Topco is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Topco Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topco Scientific 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 Topco Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topco Scientific has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Topco Scientific go up and down completely randomly.
Pair Corralation between Shinkong Insurance and Topco Scientific
Assuming the 90 days trading horizon Shinkong Insurance Co is expected to generate 0.69 times more return on investment than Topco Scientific. However, Shinkong Insurance Co is 1.45 times less risky than Topco Scientific. It trades about 0.01 of its potential returns per unit of risk. Topco Scientific Co is currently generating about -0.13 per unit of risk. If you would invest 9,960 in Shinkong Insurance Co on August 25, 2024 and sell it today you would earn a total of 20.00 from holding Shinkong Insurance Co or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinkong Insurance Co vs. Topco Scientific Co
Performance |
| Timeline |
| Shinkong Insurance |
| Topco Scientific |
Shinkong Insurance and Topco Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Insurance and Topco Scientific
The main advantage of trading using opposite Shinkong Insurance and Topco Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, Topco Scientific 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 Topco Scientific will offset losses from the drop in Topco Scientific'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 |
| Topco Scientific vs. Avalue Technology | Topco Scientific vs. Pacific Hospital Supply | Topco Scientific vs. Voltronic Power Technology | Topco Scientific vs. Chi Hua Fitness |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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