Correlation Between Shin Kong and Arbor Technology
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Arbor 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 Arbor 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 Arbor Technology, you can compare the effects of market volatilities on Shin Kong and Arbor 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 Arbor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Arbor Technology.
Diversification Opportunities for Shin Kong and Arbor Technology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and Arbor is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Arbor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor 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 Arbor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Technology has no effect on the direction of Shin Kong i.e., Shin Kong and Arbor Technology go up and down completely randomly.
Pair Corralation between Shin Kong and Arbor Technology
Assuming the 90 days trading horizon Shin Kong is expected to generate 124.82 times less return on investment than Arbor Technology. But when comparing it to its historical volatility, Shin Kong Financial is 2.98 times less risky than Arbor Technology. It trades about 0.0 of its potential returns per unit of risk. Arbor Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,835 in Arbor Technology on September 3, 2024 and sell it today you would earn a total of 1,755 from holding Arbor Technology or generate 61.9% 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. Arbor Technology
Performance |
| Timeline |
| Shin Kong Financial |
| Arbor Technology |
Shin Kong and Arbor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Arbor Technology
The main advantage of trading using opposite Shin Kong and Arbor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Arbor 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 Arbor Technology will offset losses from the drop in Arbor Technology's long position.| Shin Kong vs. Lien Chang Electronic | Shin Kong vs. GameSparcs Co | Shin Kong vs. ABC Taiwan Electronics | Shin Kong vs. International Games System |
| Arbor Technology vs. Advantech Co | Arbor Technology vs. Asustek Computer | Arbor Technology vs. Compal Electronics | Arbor Technology vs. WiseChip Semiconductor |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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