Correlation Between Shin Kong and Sunnic Technology
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Sunnic Technology 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 Sunnic Technology 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 Sunnic Technology Merchandise, you can compare the effects of market volatilities on Shin Kong and Sunnic Technology 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 Sunnic Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Sunnic Technology.
Diversification Opportunities for Shin Kong and Sunnic Technology
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and Sunnic is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Sunnic Technology Merchandise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunnic Technology 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 Sunnic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunnic Technology has no effect on the direction of Shin Kong i.e., Shin Kong and Sunnic Technology go up and down completely randomly.
Pair Corralation between Shin Kong and Sunnic Technology
Assuming the 90 days trading horizon Shin Kong Financial is expected to generate 0.3 times more return on investment than Sunnic Technology. However, Shin Kong Financial is 3.28 times less risky than Sunnic Technology. It trades about -0.06 of its potential returns per unit of risk. Sunnic Technology Merchandise is currently generating about -0.12 per unit of risk. If you would invest 1,195 in Shin Kong Financial on August 25, 2024 and sell it today you would lose (25.00) from holding Shin Kong Financial or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Kong Financial vs. Sunnic Technology Merchandise
Performance |
| Timeline |
| Shin Kong Financial |
| Sunnic Technology |
Shin Kong and Sunnic Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Sunnic Technology
The main advantage of trading using opposite Shin Kong and Sunnic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Sunnic Technology 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 Sunnic Technology will offset losses from the drop in Sunnic Technology'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 |
| Sunnic Technology vs. Iron Force Industrial | Sunnic Technology vs. Taiwan Cooperative Financial | Sunnic Technology vs. Fubon Financial Holding | Sunnic Technology vs. Taishin Financial Holding |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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