Correlation Between Shih Kuen and FineMat Applied
Can any of the company-specific risk be diversified away by investing in both Shih Kuen and FineMat 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 Shih Kuen and FineMat Applied 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 FineMat Applied Materials, you can compare the effects of market volatilities on Shih Kuen and FineMat 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 Shih Kuen with a short position of FineMat Applied. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shih Kuen and FineMat Applied.
Diversification Opportunities for Shih Kuen and FineMat Applied
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shih and FineMat is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Shih Kuen Plastics and FineMat Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FineMat Applied Materials 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 FineMat Applied. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FineMat Applied Materials has no effect on the direction of Shih Kuen i.e., Shih Kuen and FineMat Applied go up and down completely randomly.
Pair Corralation between Shih Kuen and FineMat Applied
Assuming the 90 days trading horizon Shih Kuen is expected to generate 50.0 times less return on investment than FineMat Applied. But when comparing it to its historical volatility, Shih Kuen Plastics is 2.57 times less risky than FineMat Applied. It trades about 0.0 of its potential returns per unit of risk. FineMat Applied Materials is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,660 in FineMat Applied Materials on August 26, 2024 and sell it today you would earn a total of 200.00 from holding FineMat Applied Materials or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shih Kuen Plastics vs. FineMat Applied Materials
Performance |
| Timeline |
| Shih Kuen Plastics |
| FineMat Applied Materials |
Shih Kuen and FineMat Applied Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shih Kuen and FineMat Applied
The main advantage of trading using opposite Shih Kuen and FineMat Applied positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shih Kuen position performs unexpectedly, FineMat 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 FineMat Applied will offset losses from the drop in FineMat Applied's long position.| Shih Kuen vs. SS Healthcare Holding | Shih Kuen vs. Power Wind Health | Shih Kuen vs. Pacific Hospital Supply | Shih Kuen vs. Davicom Semiconductor |
| FineMat Applied vs. Solomon Technology Corp | FineMat Applied vs. CviLux Corp | FineMat Applied vs. Shenmao Technology | FineMat Applied vs. Hanpin Electron Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |