Correlation Between Shin Kong and Capital Securities
Can any of the company-specific risk be diversified away by investing in both Shin Kong and Capital Securities 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 Capital Securities 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 Capital Securities Corp, you can compare the effects of market volatilities on Shin Kong and Capital Securities 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 Capital Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and Capital Securities.
Diversification Opportunities for Shin Kong and Capital Securities
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and Capital is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and Capital Securities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Securities 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 Capital Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Securities Corp has no effect on the direction of Shin Kong i.e., Shin Kong and Capital Securities go up and down completely randomly.
Pair Corralation between Shin Kong and Capital Securities
Assuming the 90 days trading horizon Shin Kong Financial is expected to generate 0.24 times more return on investment than Capital Securities. However, Shin Kong Financial is 4.22 times less risky than Capital Securities. It trades about 0.0 of its potential returns per unit of risk. Capital Securities Corp is currently generating about -0.08 per unit of risk. If you would invest 3,540 in Shin Kong Financial on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Shin Kong Financial or generate 0.0% 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. Capital Securities Corp
Performance |
| Timeline |
| Shin Kong Financial |
| Capital Securities Corp |
Shin Kong and Capital Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and Capital Securities
The main advantage of trading using opposite Shin Kong and Capital Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, Capital Securities 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 Capital Securities will offset losses from the drop in Capital Securities' long position.| Shin Kong vs. Avalue Technology | Shin Kong vs. Phytohealth Corp | Shin Kong vs. Vate Technology Co | Shin Kong vs. Onyx Healthcare |
| Capital Securities vs. Taiwan Secom Co | Capital Securities vs. TTET Union Corp | Capital Securities vs. China Steel Chemical | Capital Securities vs. Taiwan Shin Kong |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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