Correlation Between RDC Semiconductor and Shinkong Insurance
Can any of the company-specific risk be diversified away by investing in both RDC Semiconductor and Shinkong Insurance 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 RDC Semiconductor and Shinkong Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RDC Semiconductor Co and Shinkong Insurance Co, you can compare the effects of market volatilities on RDC Semiconductor and Shinkong Insurance 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 RDC Semiconductor with a short position of Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of RDC Semiconductor and Shinkong Insurance.
Diversification Opportunities for RDC Semiconductor and Shinkong Insurance
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RDC and Shinkong is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding RDC Semiconductor Co and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and RDC Semiconductor 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 RDC Semiconductor Co are associated (or correlated) with Shinkong Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Insurance has no effect on the direction of RDC Semiconductor i.e., RDC Semiconductor and Shinkong Insurance go up and down completely randomly.
Pair Corralation between RDC Semiconductor and Shinkong Insurance
Assuming the 90 days trading horizon RDC Semiconductor Co is expected to under-perform the Shinkong Insurance. In addition to that, RDC Semiconductor is 2.32 times more volatile than Shinkong Insurance Co. It trades about -0.14 of its total potential returns per unit of risk. Shinkong Insurance Co is currently generating about 0.03 per unit of volatility. If you would invest 9,510 in Shinkong Insurance Co on September 1, 2024 and sell it today you would earn a total of 490.00 from holding Shinkong Insurance Co or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RDC Semiconductor Co vs. Shinkong Insurance Co
Performance |
| Timeline |
| RDC Semiconductor |
| Shinkong Insurance |
RDC Semiconductor and Shinkong Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RDC Semiconductor and Shinkong Insurance
The main advantage of trading using opposite RDC Semiconductor and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RDC Semiconductor position performs unexpectedly, Shinkong Insurance 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 Shinkong Insurance will offset losses from the drop in Shinkong Insurance's long position.| RDC Semiconductor vs. Tai Tung Communication | RDC Semiconductor vs. WinMate Communication INC | RDC Semiconductor vs. Trade Van Information Services | RDC Semiconductor vs. RiTdisplay Corp |
| Shinkong Insurance vs. Central Reinsurance Corp | Shinkong Insurance vs. Huaku Development Co | Shinkong Insurance vs. Fubon Financial Holding |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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