Correlation Between Shin Kong and Laster Tech
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Laster Tech 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 Laster Tech 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 Laster Tech Corp, you can compare the effects of market volatilities on Shin Kong and Laster Tech 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 Laster Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Laster Tech.
Diversification Opportunities for Shin Kong and Laster Tech
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and Laster is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Laster Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laster Tech Corp 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 Laster Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laster Tech Corp has no effect on the direction of Shin Kong i.e., Shin Kong and Laster Tech go up and down completely randomly.
Pair Corralation between Shin Kong and Laster Tech
Assuming the 90 days trading horizon Shin Kong Financial is expected to generate 0.71 times more return on investment than Laster Tech. However, Shin Kong Financial is 1.41 times less risky than Laster Tech. It trades about 0.05 of its potential returns per unit of risk. Laster Tech Corp is currently generating about 0.02 per unit of risk. If you would invest 896.00 in Shin Kong Financial on August 31, 2024 and sell it today you would earn a total of 274.00 from holding Shin Kong Financial or generate 30.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Shin Kong Financial vs. Laster Tech Corp
Performance |
| Timeline |
| Shin Kong Financial |
| Laster Tech Corp |
Shin Kong and Laster Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Laster Tech
The main advantage of trading using opposite Shin Kong and Laster Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Laster Tech 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 Laster Tech will offset losses from the drop in Laster Tech'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 |
| Laster Tech vs. Excellence Optoelectronic | Laster Tech vs. Hota Industrial Mfg | Laster Tech vs. Global PMX Co | Laster Tech vs. Cub Elecparts |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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