Correlation Between Shin Kong and SYN Tech
Can any of the company-specific risk be diversified away by investing in both Shin Kong and SYN Tech 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 SYN Tech 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 SYN Tech Chem Pharm, you can compare the effects of market volatilities on Shin Kong and SYN Tech 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 SYN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and SYN Tech.
Diversification Opportunities for Shin Kong and SYN Tech
Excellent diversification
The 3 months correlation between Shin and SYN is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and SYN Tech Chem Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYN Tech Chem 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 SYN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYN Tech Chem has no effect on the direction of Shin Kong i.e., Shin Kong and SYN Tech go up and down completely randomly.
Pair Corralation between Shin Kong and SYN Tech
Assuming the 90 days trading horizon Shin Kong is expected to generate 1.2 times less return on investment than SYN Tech. But when comparing it to its historical volatility, Shin Kong Financial is 1.03 times less risky than SYN Tech. It trades about 0.06 of its potential returns per unit of risk. SYN Tech Chem Pharm is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,166 in SYN Tech Chem Pharm on September 4, 2024 and sell it today you would earn a total of 1,744 from holding SYN Tech Chem Pharm or generate 21.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Kong Financial vs. SYN Tech Chem Pharm
Performance |
| Timeline |
| Shin Kong Financial |
| SYN Tech Chem |
Shin Kong and SYN Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and SYN Tech
The main advantage of trading using opposite Shin Kong and SYN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, SYN Tech 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 SYN Tech will offset losses from the drop in SYN Tech's long position.| Shin Kong vs. Data International Co | Shin Kong vs. Taiwan Mobile Co | Shin Kong vs. Datavan International | Shin Kong vs. Tainet Communication System |
| SYN Tech vs. Symtek Automation Asia | SYN Tech vs. WiseChip Semiconductor | SYN Tech vs. Novatek Microelectronics Corp | SYN Tech vs. Leader Electronics |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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