Correlation Between Est Global and Shih Kuen
Can any of the company-specific risk be diversified away by investing in both Est Global and Shih Kuen 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 Est Global and Shih Kuen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Est Global Apparel and Shih Kuen Plastics, you can compare the effects of market volatilities on Est Global and Shih Kuen 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 Est Global with a short position of Shih Kuen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Est Global and Shih Kuen.
Diversification Opportunities for Est Global and Shih Kuen
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Est and Shih is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Est Global Apparel and Shih Kuen Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shih Kuen Plastics and Est Global 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 Est Global Apparel are associated (or correlated) with Shih Kuen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shih Kuen Plastics has no effect on the direction of Est Global i.e., Est Global and Shih Kuen go up and down completely randomly.
Pair Corralation between Est Global and Shih Kuen
Assuming the 90 days trading horizon Est Global is expected to generate 1.25 times less return on investment than Shih Kuen. In addition to that, Est Global is 1.54 times more volatile than Shih Kuen Plastics. It trades about 0.03 of its total potential returns per unit of risk. Shih Kuen Plastics is currently generating about 0.06 per unit of volatility. If you would invest 3,059 in Shih Kuen Plastics on September 2, 2024 and sell it today you would earn a total of 1,206 from holding Shih Kuen Plastics or generate 39.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Est Global Apparel vs. Shih Kuen Plastics
Performance |
| Timeline |
| Est Global Apparel |
| Shih Kuen Plastics |
Est Global and Shih Kuen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Est Global and Shih Kuen
The main advantage of trading using opposite Est Global and Shih Kuen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Est Global position performs unexpectedly, Shih Kuen 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 Kuen will offset losses from the drop in Shih Kuen's long position.| Est Global vs. Far Eastern New | Est Global vs. Eclat Textile Co | Est Global vs. Ruentex Industries | Est Global vs. Formosa Taffeta Co |
| Shih Kuen vs. Wha Yu Industrial | Shih Kuen vs. Tsang Yow Industrial | Shih Kuen vs. TWOWAY Communications | Shih Kuen vs. Tex Ray Industrial 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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