Correlation Between Shin Shin and Standard Foods
Can any of the company-specific risk be diversified away by investing in both Shin Shin and Standard Foods 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 Shin and Standard Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Shin Co and Standard Foods Corp, you can compare the effects of market volatilities on Shin Shin and Standard Foods 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 Shin with a short position of Standard Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Shin and Standard Foods.
Diversification Opportunities for Shin Shin and Standard Foods
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shin and Standard is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Shin Shin Co and Standard Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Foods Corp and Shin Shin 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 Shin Co are associated (or correlated) with Standard Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Foods Corp has no effect on the direction of Shin Shin i.e., Shin Shin and Standard Foods go up and down completely randomly.
Pair Corralation between Shin Shin and Standard Foods
Assuming the 90 days trading horizon Shin Shin Co is expected to generate 1.5 times more return on investment than Standard Foods. However, Shin Shin is 1.5 times more volatile than Standard Foods Corp. It trades about 0.03 of its potential returns per unit of risk. Standard Foods Corp is currently generating about -0.01 per unit of risk. If you would invest 2,370 in Shin Shin Co on September 3, 2024 and sell it today you would earn a total of 405.00 from holding Shin Shin Co or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Shin Co vs. Standard Foods Corp
Performance |
| Timeline |
| Shin Shin |
| Standard Foods Corp |
Shin Shin and Standard Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Shin and Standard Foods
The main advantage of trading using opposite Shin Shin and Standard Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Shin position performs unexpectedly, Standard Foods 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 Standard Foods will offset losses from the drop in Standard Foods' long position.| Shin Shin vs. Standard Foods Corp | Shin Shin vs. TTET Union Corp | Shin Shin vs. Uni President Enterprises Corp | Shin Shin vs. Charoen Pokphand Enterprise |
| Standard Foods vs. TTET Union Corp | Standard Foods vs. Uni President Enterprises Corp | Standard Foods vs. Charoen Pokphand Enterprise |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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