Correlation Between Shih Kuen and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both Shih Kuen and Avalue 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 Shih Kuen and Avalue Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shih Kuen Plastics and Avalue Technology, you can compare the effects of market volatilities on Shih Kuen and Avalue 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 Shih Kuen with a short position of Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shih Kuen and Avalue Technology.
Diversification Opportunities for Shih Kuen and Avalue Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shih and Avalue is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shih Kuen Plastics and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue Technology and Shih Kuen 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 Shih Kuen Plastics are associated (or correlated) with Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of Shih Kuen i.e., Shih Kuen and Avalue Technology go up and down completely randomly.
Pair Corralation between Shih Kuen and Avalue Technology
Assuming the 90 days trading horizon Shih Kuen Plastics is expected to under-perform the Avalue Technology. But the stock apears to be less risky and, when comparing its historical volatility, Shih Kuen Plastics is 1.06 times less risky than Avalue Technology. The stock trades about -0.23 of its potential returns per unit of risk. The Avalue Technology is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 10,200 in Avalue Technology on August 30, 2024 and sell it today you would lose (260.00) from holding Avalue Technology or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shih Kuen Plastics vs. Avalue Technology
Performance |
| Timeline |
| Shih Kuen Plastics |
| Avalue Technology |
Shih Kuen and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shih Kuen and Avalue Technology
The main advantage of trading using opposite Shih Kuen and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shih Kuen position performs unexpectedly, Avalue 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 Avalue Technology will offset losses from the drop in Avalue Technology's long position.| Shih Kuen vs. U Media Communications | Shih Kuen vs. Tainet Communication System | Shih Kuen vs. FDC International Hotels | Shih Kuen vs. Est Global Apparel |
| Avalue Technology vs. International CSRC Investment | Avalue Technology vs. Farglory FTZ Investment | Avalue Technology vs. ReaLy Development Construction | Avalue Technology vs. Chung Hsin Electric Machinery |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |