Correlation Between Shin Kong and Shuang Bang
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Shuang Bang 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 Shuang Bang 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 Shuang Bang Industrial, you can compare the effects of market volatilities on Shin Kong and Shuang Bang 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 Shuang Bang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Shuang Bang.
Diversification Opportunities for Shin Kong and Shuang Bang
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shin and Shuang is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Shuang Bang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuang Bang Industrial 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 Shuang Bang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuang Bang Industrial has no effect on the direction of Shin Kong i.e., Shin Kong and Shuang Bang go up and down completely randomly.
Pair Corralation between Shin Kong and Shuang Bang
Assuming the 90 days trading horizon Shin Kong Financial is expected to generate 0.32 times more return on investment than Shuang Bang. However, Shin Kong Financial is 3.13 times less risky than Shuang Bang. It trades about 0.25 of its potential returns per unit of risk. Shuang Bang Industrial is currently generating about -0.19 per unit of risk. If you would invest 1,135 in Shin Kong Financial on August 30, 2024 and sell it today you would earn a total of 40.00 from holding Shin Kong Financial or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Kong Financial vs. Shuang Bang Industrial
Performance |
| Timeline |
| Shin Kong Financial |
| Shuang Bang Industrial |
Shin Kong and Shuang Bang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Shuang Bang
The main advantage of trading using opposite Shin Kong and Shuang Bang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Shuang Bang 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 Shuang Bang will offset losses from the drop in Shuang Bang'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 |
| Shuang Bang vs. Nantex Industry Co | Shuang Bang vs. Chong Hong Construction | Shuang Bang vs. Cleanaway Co | Shuang Bang vs. Symtek Automation Asia |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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