Correlation Between Shin Kong and Sensortek Technology
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Sensortek 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 Sensortek 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 Sensortek Technology Corp, you can compare the effects of market volatilities on Shin Kong and Sensortek 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 Sensortek Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Sensortek Technology.
Diversification Opportunities for Shin Kong and Sensortek Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and Sensortek is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Sensortek Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensortek Technology 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 Sensortek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensortek Technology Corp has no effect on the direction of Shin Kong i.e., Shin Kong and Sensortek Technology go up and down completely randomly.
Pair Corralation between Shin Kong and Sensortek Technology
Assuming the 90 days trading horizon Shin Kong Financial is expected to generate 0.63 times more return on investment than Sensortek Technology. However, Shin Kong Financial is 1.59 times less risky than Sensortek Technology. It trades about 0.05 of its potential returns per unit of risk. Sensortek Technology Corp is currently generating about -0.01 per unit of risk. If you would invest 929.00 in Shin Kong Financial on September 2, 2024 and sell it today you would earn a total of 226.00 from holding Shin Kong Financial or generate 24.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Kong Financial vs. Sensortek Technology Corp
Performance |
| Timeline |
| Shin Kong Financial |
| Sensortek Technology Corp |
Shin Kong and Sensortek Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Sensortek Technology
The main advantage of trading using opposite Shin Kong and Sensortek Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Sensortek 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 Sensortek Technology will offset losses from the drop in Sensortek Technology's long position.| Shin Kong vs. Central Reinsurance Corp | Shin Kong vs. Huaku Development Co | Shin Kong vs. Fubon Financial Holding |
| Sensortek Technology vs. Aspeed Technology | Sensortek Technology vs. Asmedia Technology | Sensortek Technology vs. eMemory Technology | Sensortek Technology vs. Sitronix Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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