Correlation Between Shinkong Insurance and Wonderful
Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Wonderful 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 Wonderful 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 Wonderful Hi Tech Co, you can compare the effects of market volatilities on Shinkong Insurance and Wonderful 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 Wonderful. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Wonderful.
Diversification Opportunities for Shinkong Insurance and Wonderful
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shinkong and Wonderful is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Wonderful Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonderful Hi Tech 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 Wonderful. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonderful Hi Tech has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Wonderful go up and down completely randomly.
Pair Corralation between Shinkong Insurance and Wonderful
Assuming the 90 days trading horizon Shinkong Insurance Co is expected to generate 0.5 times more return on investment than Wonderful. However, Shinkong Insurance Co is 2.01 times less risky than Wonderful. It trades about 0.08 of its potential returns per unit of risk. Wonderful Hi Tech Co is currently generating about -0.02 per unit of risk. If you would invest 9,940 in Shinkong Insurance Co on September 13, 2024 and sell it today you would earn a total of 360.00 from holding Shinkong Insurance Co or generate 3.62% 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. Wonderful Hi Tech Co
Performance |
| Timeline |
| Shinkong Insurance |
| Wonderful Hi Tech |
Shinkong Insurance and Wonderful Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinkong Insurance and Wonderful
The main advantage of trading using opposite Shinkong Insurance and Wonderful positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, Wonderful 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 Wonderful will offset losses from the drop in Wonderful'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 |
| Wonderful vs. Gemtek Technology Co | Wonderful vs. Ruentex Development Co | Wonderful vs. WiseChip Semiconductor | Wonderful vs. Novatek Microelectronics Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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