Correlation Between Roo Hsing and Shinkong Insurance
Can any of the company-specific risk be diversified away by investing in both Roo Hsing and Shinkong Insurance 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 Roo Hsing and Shinkong Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roo Hsing Co and Shinkong Insurance Co, you can compare the effects of market volatilities on Roo Hsing and Shinkong Insurance 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 Roo Hsing with a short position of Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roo Hsing and Shinkong Insurance.
Diversification Opportunities for Roo Hsing and Shinkong Insurance
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roo and Shinkong is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Roo Hsing Co and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and Roo Hsing 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 Roo Hsing Co are associated (or correlated) with Shinkong Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Insurance has no effect on the direction of Roo Hsing i.e., Roo Hsing and Shinkong Insurance go up and down completely randomly.
Pair Corralation between Roo Hsing and Shinkong Insurance
Assuming the 90 days trading horizon Roo Hsing Co is expected to generate 2.01 times more return on investment than Shinkong Insurance. However, Roo Hsing is 2.01 times more volatile than Shinkong Insurance Co. It trades about 0.27 of its potential returns per unit of risk. Shinkong Insurance Co is currently generating about 0.1 per unit of risk. If you would invest 289.00 in Roo Hsing Co on September 4, 2024 and sell it today you would earn a total of 29.00 from holding Roo Hsing Co or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roo Hsing Co vs. Shinkong Insurance Co
Performance |
| Timeline |
| Roo Hsing |
| Shinkong Insurance |
Roo Hsing and Shinkong Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roo Hsing and Shinkong Insurance
The main advantage of trading using opposite Roo Hsing and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roo Hsing position performs unexpectedly, Shinkong Insurance 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 Shinkong Insurance will offset losses from the drop in Shinkong Insurance's long position.| Roo Hsing vs. Shinkong Insurance Co | Roo Hsing vs. Mercuries Life Insurance | Roo Hsing vs. HIM International Music | Roo Hsing vs. Chief Telecom |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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