Correlation Between Shin Kong and Integrated Service
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Integrated Service 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 Shin Kong and Integrated Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Kong Financial and Integrated Service Technology, you can compare the effects of market volatilities on Shin Kong and Integrated Service 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 Shin Kong with a short position of Integrated Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Integrated Service.
Diversification Opportunities for Shin Kong and Integrated Service
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and Integrated is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service and Shin Kong 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 Shin Kong Financial are associated (or correlated) with Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of Shin Kong i.e., Shin Kong and Integrated Service go up and down completely randomly.
Pair Corralation between Shin Kong and Integrated Service
Assuming the 90 days trading horizon Shin Kong Financial is expected to generate 0.2 times more return on investment than Integrated Service. However, Shin Kong Financial is 4.94 times less risky than Integrated Service. It trades about 0.23 of its potential returns per unit of risk. Integrated Service Technology is currently generating about -0.33 per unit of risk. If you would invest 1,140 in Shin Kong Financial on August 28, 2024 and sell it today you would earn a total of 35.00 from holding Shin Kong Financial or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Kong Financial vs. Integrated Service Technology
Performance |
| Timeline |
| Shin Kong Financial |
| Integrated Service |
Shin Kong and Integrated Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Integrated Service
The main advantage of trading using opposite Shin Kong and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Integrated Service 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 Integrated Service will offset losses from the drop in Integrated Service's long position.| Shin Kong vs. Cathay Financial Holding | Shin Kong vs. Taishin Financial Holding | Shin Kong vs. Fubon Financial Holding | Shin Kong vs. CTBC Financial Holding |
| Integrated Service vs. Global Unichip Corp | Integrated Service vs. Asmedia Technology | Integrated Service vs. Unimicron Technology Corp | Integrated Service 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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