Correlation Between Shin Kong and Concraft Holding
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Concraft Holding 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 Concraft Holding 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 Concraft Holding Co, you can compare the effects of market volatilities on Shin Kong and Concraft Holding 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 Concraft Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Concraft Holding.
Diversification Opportunities for Shin Kong and Concraft Holding
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shin and Concraft is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Concraft Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concraft Holding 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 Concraft Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concraft Holding has no effect on the direction of Shin Kong i.e., Shin Kong and Concraft Holding go up and down completely randomly.
Pair Corralation between Shin Kong and Concraft Holding
Assuming the 90 days trading horizon Shin Kong Financial is expected to generate 0.31 times more return on investment than Concraft Holding. However, Shin Kong Financial is 3.26 times less risky than Concraft Holding. It trades about 0.12 of its potential returns per unit of risk. Concraft Holding Co is currently generating about -0.08 per unit of risk. If you would invest 1,230 in Shin Kong Financial on November 28, 2024 and sell it today you would earn a total of 15.00 from holding Shin Kong Financial or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Shin Kong Financial vs. Concraft Holding Co
Performance |
| Timeline |
| Shin Kong Financial |
| Concraft Holding |
Shin Kong and Concraft Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Concraft Holding
The main advantage of trading using opposite Shin Kong and Concraft Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Concraft Holding 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 Concraft Holding will offset losses from the drop in Concraft Holding'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 |
| Concraft Holding vs. Merry Electronics Co | Concraft Holding vs. Flexium Interconnect | Concraft Holding vs. General Interface Solution | Concraft Holding vs. Genius Electronic Optical |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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