Correlation Between Shin Kong and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Avalue 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 Avalue 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 Avalue Technology, you can compare the effects of market volatilities on Shin Kong and Avalue 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 Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Avalue Technology.
Diversification Opportunities for Shin Kong and Avalue Technology
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shin and Avalue is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue Technology 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 Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of Shin Kong i.e., Shin Kong and Avalue Technology go up and down completely randomly.
Pair Corralation between Shin Kong and Avalue Technology
Assuming the 90 days trading horizon Shin Kong Financial is expected to generate 0.13 times more return on investment than Avalue Technology. However, Shin Kong Financial is 7.76 times less risky than Avalue Technology. It trades about -0.13 of its potential returns per unit of risk. Avalue Technology is currently generating about -0.06 per unit of risk. If you would invest 3,560 in Shin Kong Financial on September 1, 2024 and sell it today you would lose (20.00) from holding Shin Kong Financial or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Kong Financial vs. Avalue Technology
Performance |
| Timeline |
| Shin Kong Financial |
| Avalue Technology |
Shin Kong and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Avalue Technology
The main advantage of trading using opposite Shin Kong and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Avalue 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 Avalue Technology will offset losses from the drop in Avalue Technology's long position.| Shin Kong vs. Arbor Technology | Shin Kong vs. Oceanic Beverages Co | Shin Kong vs. Hi Lai Foods Co | Shin Kong vs. Lian Hwa Foods |
| Avalue Technology vs. Quanta Computer | Avalue Technology vs. Wiwynn Corp | Avalue Technology vs. Getac Technology Corp | Avalue Technology vs. InnoDisk |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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