Correlation Between Shin Kong and Dadi Early
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Dadi Early 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 Dadi Early 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 Dadi Early Childhood Education, you can compare the effects of market volatilities on Shin Kong and Dadi Early 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 Dadi Early. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Dadi Early.
Diversification Opportunities for Shin Kong and Dadi Early
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and Dadi is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Dadi Early Childhood Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dadi Early Childhood 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 Dadi Early. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dadi Early Childhood has no effect on the direction of Shin Kong i.e., Shin Kong and Dadi Early go up and down completely randomly.
Pair Corralation between Shin Kong and Dadi Early
Assuming the 90 days trading horizon Shin Kong Financial is expected to generate 0.34 times more return on investment than Dadi Early. However, Shin Kong Financial is 2.92 times less risky than Dadi Early. It trades about -0.03 of its potential returns per unit of risk. Dadi Early Childhood Education is currently generating about -0.07 per unit of risk. If you would invest 1,200 in Shin Kong Financial on August 28, 2024 and sell it today you would lose (15.00) from holding Shin Kong Financial or give up 1.25% 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. Dadi Early Childhood Education
Performance |
| Timeline |
| Shin Kong Financial |
| Dadi Early Childhood |
Shin Kong and Dadi Early Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Dadi Early
The main advantage of trading using opposite Shin Kong and Dadi Early positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Dadi Early 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 Dadi Early will offset losses from the drop in Dadi Early'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 |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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