Correlation Between Shin Zu and Solar Applied
Can any of the company-specific risk be diversified away by investing in both Shin Zu and Solar Applied 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 Zu and Solar Applied into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Zu Shing and Solar Applied Materials, you can compare the effects of market volatilities on Shin Zu and Solar Applied 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 Zu with a short position of Solar Applied. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Zu and Solar Applied.
Diversification Opportunities for Shin Zu and Solar Applied
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shin and Solar is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Shin Zu Shing and Solar Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Applied Materials and Shin Zu 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 Zu Shing are associated (or correlated) with Solar Applied. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Applied Materials has no effect on the direction of Shin Zu i.e., Shin Zu and Solar Applied go up and down completely randomly.
Pair Corralation between Shin Zu and Solar Applied
Assuming the 90 days trading horizon Shin Zu Shing is expected to generate 1.29 times more return on investment than Solar Applied. However, Shin Zu is 1.29 times more volatile than Solar Applied Materials. It trades about 0.09 of its potential returns per unit of risk. Solar Applied Materials is currently generating about -0.03 per unit of risk. If you would invest 20,450 in Shin Zu Shing on October 29, 2024 and sell it today you would earn a total of 950.00 from holding Shin Zu Shing or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Zu Shing vs. Solar Applied Materials
Performance |
| Timeline |
| Shin Zu Shing |
| Solar Applied Materials |
Shin Zu and Solar Applied Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Zu and Solar Applied
The main advantage of trading using opposite Shin Zu and Solar Applied positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Zu position performs unexpectedly, Solar Applied 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 Solar Applied will offset losses from the drop in Solar Applied's long position.| Shin Zu vs. Catcher Technology Co | Shin Zu vs. Tripod Technology Corp | Shin Zu vs. Chicony Electronics Co | Shin Zu vs. Kinsus Interconnect Technology |
| Solar Applied vs. Catcher Technology Co | Solar Applied vs. Evergreen Steel Corp | Solar Applied vs. Shin Zu Shing | Solar Applied vs. China Metal Products |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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