Correlation Between Yuanta Financial and Shinkong Insurance
Can any of the company-specific risk be diversified away by investing in both Yuanta Financial and Shinkong Insurance 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 Yuanta Financial and Shinkong Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuanta Financial Holdings and Shinkong Insurance Co, you can compare the effects of market volatilities on Yuanta Financial and Shinkong Insurance 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 Yuanta Financial with a short position of Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Financial and Shinkong Insurance.
Diversification Opportunities for Yuanta Financial and Shinkong Insurance
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yuanta and Shinkong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and Yuanta Financial 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 Yuanta Financial Holdings are associated (or correlated) with Shinkong Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Insurance has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Shinkong Insurance go up and down completely randomly.
Pair Corralation between Yuanta Financial and Shinkong Insurance
Assuming the 90 days trading horizon Yuanta Financial Holdings is expected to generate 1.22 times more return on investment than Shinkong Insurance. However, Yuanta Financial is 1.22 times more volatile than Shinkong Insurance Co. It trades about 0.15 of its potential returns per unit of risk. Shinkong Insurance Co is currently generating about 0.0 per unit of risk. If you would invest 3,210 in Yuanta Financial Holdings on September 2, 2024 and sell it today you would earn a total of 115.00 from holding Yuanta Financial Holdings or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuanta Financial Holdings vs. Shinkong Insurance Co
Performance |
| Timeline |
| Yuanta Financial Holdings |
| Shinkong Insurance |
Yuanta Financial and Shinkong Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuanta Financial and Shinkong Insurance
The main advantage of trading using opposite Yuanta Financial and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Financial position performs unexpectedly, Shinkong Insurance 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 Shinkong Insurance will offset losses from the drop in Shinkong Insurance's long position.| Yuanta Financial vs. Central Reinsurance Corp | Yuanta Financial vs. Huaku Development Co | Yuanta Financial vs. Fubon Financial Holding |
| Shinkong Insurance vs. Central Reinsurance Corp | Shinkong Insurance vs. Huaku Development Co | Shinkong Insurance vs. Fubon Financial Holding | Shinkong Insurance vs. Chailease Holding 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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