Correlation Between Newretail and Shih Kuen
Can any of the company-specific risk be diversified away by investing in both Newretail and Shih Kuen 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 Newretail and Shih Kuen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newretail Co and Shih Kuen Plastics, you can compare the effects of market volatilities on Newretail and Shih Kuen 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 Newretail with a short position of Shih Kuen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newretail and Shih Kuen.
Diversification Opportunities for Newretail and Shih Kuen
Very good diversification
The 3 months correlation between Newretail and Shih is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Shih Kuen Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shih Kuen Plastics and Newretail 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 Newretail Co are associated (or correlated) with Shih Kuen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shih Kuen Plastics has no effect on the direction of Newretail i.e., Newretail and Shih Kuen go up and down completely randomly.
Pair Corralation between Newretail and Shih Kuen
Assuming the 90 days trading horizon Newretail Co is expected to generate 3.17 times more return on investment than Shih Kuen. However, Newretail is 3.17 times more volatile than Shih Kuen Plastics. It trades about 0.11 of its potential returns per unit of risk. Shih Kuen Plastics is currently generating about -0.05 per unit of risk. If you would invest 1,480 in Newretail Co on September 3, 2024 and sell it today you would earn a total of 1,000.00 from holding Newretail Co or generate 67.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newretail Co vs. Shih Kuen Plastics
Performance |
| Timeline |
| Newretail |
| Shih Kuen Plastics |
Newretail and Shih Kuen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newretail and Shih Kuen
The main advantage of trading using opposite Newretail and Shih Kuen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newretail position performs unexpectedly, Shih Kuen 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 Shih Kuen will offset losses from the drop in Shih Kuen's long position.| Newretail vs. President Chain Store | Newretail vs. Uni President Enterprises Corp | Newretail vs. Taiwan FamilyMart Co | Newretail vs. Eclat Textile Co |
| Shih Kuen vs. Cheng Shin Rubber | Shih Kuen vs. Nankang Rubber Tire | Shih Kuen vs. Asia Polymer Corp | Shih Kuen vs. Ocean Plastics Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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