Correlation Between Continental Holdings and Shih Wei
Can any of the company-specific risk be diversified away by investing in both Continental Holdings and Shih Wei 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 Continental Holdings and Shih Wei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Holdings Corp and Shih Wei Navigation, you can compare the effects of market volatilities on Continental Holdings and Shih Wei 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 Continental Holdings with a short position of Shih Wei. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Holdings and Shih Wei.
Diversification Opportunities for Continental Holdings and Shih Wei
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Continental and Shih is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Continental Holdings Corp and Shih Wei Navigation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shih Wei Navigation and Continental Holdings 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 Continental Holdings Corp are associated (or correlated) with Shih Wei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shih Wei Navigation has no effect on the direction of Continental Holdings i.e., Continental Holdings and Shih Wei go up and down completely randomly.
Pair Corralation between Continental Holdings and Shih Wei
Assuming the 90 days trading horizon Continental Holdings Corp is expected to generate 1.38 times more return on investment than Shih Wei. However, Continental Holdings is 1.38 times more volatile than Shih Wei Navigation. It trades about 0.15 of its potential returns per unit of risk. Shih Wei Navigation is currently generating about 0.04 per unit of risk. If you would invest 2,815 in Continental Holdings Corp on August 31, 2024 and sell it today you would earn a total of 225.00 from holding Continental Holdings Corp or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Continental Holdings Corp vs. Shih Wei Navigation
Performance |
| Timeline |
| Continental Holdings Corp |
| Shih Wei Navigation |
Continental Holdings and Shih Wei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Holdings and Shih Wei
The main advantage of trading using opposite Continental Holdings and Shih Wei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Holdings position performs unexpectedly, Shih Wei 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 Wei will offset losses from the drop in Shih Wei's long position.| Continental Holdings vs. BES Engineering Co | Continental Holdings vs. Kee Tai Properties | Continental Holdings vs. Hung Sheng Construction |
| Shih Wei vs. BES Engineering Co | Shih Wei vs. Continental Holdings Corp | Shih Wei vs. Kee Tai Properties | Shih Wei vs. Hung Sheng Construction |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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