Correlation Between Mega Financial and Shin Kong
Can any of the company-specific risk be diversified away by investing in both Mega Financial and Shin Kong 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 Mega Financial and Shin Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mega Financial Holding and Shin Kong Financial, you can compare the effects of market volatilities on Mega Financial and Shin Kong 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 Mega Financial with a short position of Shin Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Financial and Shin Kong.
Diversification Opportunities for Mega Financial and Shin Kong
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mega and Shin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mega Financial Holding and Shin Kong Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Kong Financial and Mega 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 Mega Financial Holding are associated (or correlated) with Shin Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Kong Financial has no effect on the direction of Mega Financial i.e., Mega Financial and Shin Kong go up and down completely randomly.
Pair Corralation between Mega Financial and Shin Kong
Assuming the 90 days trading horizon Mega Financial Holding is expected to generate 4.25 times more return on investment than Shin Kong. However, Mega Financial is 4.25 times more volatile than Shin Kong Financial. It trades about 0.04 of its potential returns per unit of risk. Shin Kong Financial is currently generating about 0.14 per unit of risk. If you would invest 3,915 in Mega Financial Holding on September 13, 2024 and sell it today you would earn a total of 25.00 from holding Mega Financial Holding or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Financial Holding vs. Shin Kong Financial
Performance |
| Timeline |
| Mega Financial Holding |
| Shin Kong Financial |
Mega Financial and Shin Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Financial and Shin Kong
The main advantage of trading using opposite Mega Financial and Shin Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Financial position performs unexpectedly, Shin Kong 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 Shin Kong will offset losses from the drop in Shin Kong's long position.| Mega Financial vs. Central Reinsurance Corp | Mega Financial vs. Huaku Development Co | Mega Financial vs. Fubon Financial Holding | Mega Financial vs. Chailease Holding Co |
| Shin Kong vs. Tait Marketing Distribution | Shin Kong vs. ALFORMER Industrial Co | Shin Kong vs. Singtex Industrial Co | Shin Kong vs. uPI Semiconductor 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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