Correlation Between Shin Kong and EirGenix
Can any of the company-specific risk be diversified away by investing in both Shin Kong and EirGenix 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 EirGenix 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 EirGenix, you can compare the effects of market volatilities on Shin Kong and EirGenix 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 EirGenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Kong and EirGenix.
Diversification Opportunities for Shin Kong and EirGenix
Excellent diversification
The 3 months correlation between Shin and EirGenix is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shin Kong Financial and EirGenix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EirGenix 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 EirGenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EirGenix has no effect on the direction of Shin Kong i.e., Shin Kong and EirGenix go up and down completely randomly.
Pair Corralation between Shin Kong and EirGenix
Assuming the 90 days trading horizon Shin Kong Financial is expected to under-perform the EirGenix. But the stock apears to be less risky and, when comparing its historical volatility, Shin Kong Financial is 4.56 times less risky than EirGenix. The stock trades about -0.15 of its potential returns per unit of risk. The EirGenix is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8,300 in EirGenix on September 12, 2024 and sell it today you would lose (10.00) from holding EirGenix or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Kong Financial vs. EirGenix
Performance |
| Timeline |
| Shin Kong Financial |
| EirGenix |
Shin Kong and EirGenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Kong and EirGenix
The main advantage of trading using opposite Shin Kong and EirGenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Kong position performs unexpectedly, EirGenix 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 EirGenix will offset losses from the drop in EirGenix's long position.| Shin Kong vs. EnTie Commercial Bank | Shin Kong vs. Newretail Co | Shin Kong vs. Taichung Commercial Bank | Shin Kong vs. Mega Financial Holding |
| EirGenix vs. Asia Electronic Material | EirGenix vs. Apex Biotechnology Corp | EirGenix vs. Chailease Holding Co | EirGenix vs. PChome Online |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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