Correlation Between Fitipower Integrated and Shihlin Electric
Can any of the company-specific risk be diversified away by investing in both Fitipower Integrated and Shihlin Electric 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 Fitipower Integrated and Shihlin Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fitipower Integrated Technology and Shihlin Electric Engineering, you can compare the effects of market volatilities on Fitipower Integrated and Shihlin Electric 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 Fitipower Integrated with a short position of Shihlin Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fitipower Integrated and Shihlin Electric.
Diversification Opportunities for Fitipower Integrated and Shihlin Electric
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fitipower and Shihlin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fitipower Integrated Technolog and Shihlin Electric Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shihlin Electric Eng and Fitipower Integrated 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 Fitipower Integrated Technology are associated (or correlated) with Shihlin Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shihlin Electric Eng has no effect on the direction of Fitipower Integrated i.e., Fitipower Integrated and Shihlin Electric go up and down completely randomly.
Pair Corralation between Fitipower Integrated and Shihlin Electric
Assuming the 90 days trading horizon Fitipower Integrated Technology is expected to under-perform the Shihlin Electric. But the stock apears to be less risky and, when comparing its historical volatility, Fitipower Integrated Technology is 1.24 times less risky than Shihlin Electric. The stock trades about -0.19 of its potential returns per unit of risk. The Shihlin Electric Engineering is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 20,200 in Shihlin Electric Engineering on August 30, 2024 and sell it today you would lose (350.00) from holding Shihlin Electric Engineering or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fitipower Integrated Technolog vs. Shihlin Electric Engineering
Performance |
| Timeline |
| Fitipower Integrated |
| Shihlin Electric Eng |
Fitipower Integrated and Shihlin Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fitipower Integrated and Shihlin Electric
The main advantage of trading using opposite Fitipower Integrated and Shihlin Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fitipower Integrated position performs unexpectedly, Shihlin Electric 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 Shihlin Electric will offset losses from the drop in Shihlin Electric's long position.| Fitipower Integrated vs. Taiwan Semiconductor Manufacturing | Fitipower Integrated vs. MediaTek | Fitipower Integrated vs. United Microelectronics | Fitipower Integrated vs. Novatek Microelectronics Corp |
| Shihlin Electric vs. TECO Electric Machinery | Shihlin Electric vs. Walsin Lihwa Corp | Shihlin Electric vs. Formosa Taffeta Co | Shihlin Electric vs. Far Eastern New |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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