Correlation Between Shin Zu and Career Technology
Can any of the company-specific risk be diversified away by investing in both Shin Zu and Career Technology 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 Career Technology 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 Career Technology MFG, you can compare the effects of market volatilities on Shin Zu and Career Technology 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 Career Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Zu and Career Technology.
Diversification Opportunities for Shin Zu and Career Technology
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shin and Career is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shin Zu Shing and Career Technology MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Career Technology MFG 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 Career Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Career Technology MFG has no effect on the direction of Shin Zu i.e., Shin Zu and Career Technology go up and down completely randomly.
Pair Corralation between Shin Zu and Career Technology
Assuming the 90 days trading horizon Shin Zu Shing is expected to generate 2.3 times more return on investment than Career Technology. However, Shin Zu is 2.3 times more volatile than Career Technology MFG. It trades about 0.16 of its potential returns per unit of risk. Career Technology MFG is currently generating about -0.4 per unit of risk. If you would invest 17,500 in Shin Zu Shing on September 3, 2024 and sell it today you would earn a total of 1,850 from holding Shin Zu Shing or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Zu Shing vs. Career Technology MFG
Performance |
| Timeline |
| Shin Zu Shing |
| Career Technology MFG |
Shin Zu and Career Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Zu and Career Technology
The main advantage of trading using opposite Shin Zu and Career Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Zu position performs unexpectedly, Career Technology 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 Career Technology will offset losses from the drop in Career Technology'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 |
| Career Technology vs. Taiwan Semiconductor Manufacturing | Career Technology vs. Yang Ming Marine | Career Technology vs. ASE Industrial Holding | Career Technology vs. AU Optronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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