Correlation Between San Shing and TBI Motion
Can any of the company-specific risk be diversified away by investing in both San Shing and TBI Motion 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 San Shing and TBI Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Shing Fastech and TBI Motion Technology, you can compare the effects of market volatilities on San Shing and TBI Motion 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 San Shing with a short position of TBI Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Shing and TBI Motion.
Diversification Opportunities for San Shing and TBI Motion
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between San and TBI is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding San Shing Fastech and TBI Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBI Motion Technology and San Shing 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 San Shing Fastech are associated (or correlated) with TBI Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBI Motion Technology has no effect on the direction of San Shing i.e., San Shing and TBI Motion go up and down completely randomly.
Pair Corralation between San Shing and TBI Motion
Assuming the 90 days trading horizon San Shing Fastech is expected to under-perform the TBI Motion. But the stock apears to be less risky and, when comparing its historical volatility, San Shing Fastech is 3.3 times less risky than TBI Motion. The stock trades about -0.12 of its potential returns per unit of risk. The TBI Motion Technology is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4,240 in TBI Motion Technology on September 12, 2024 and sell it today you would lose (70.00) from holding TBI Motion Technology or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Shing Fastech vs. TBI Motion Technology
Performance |
| Timeline |
| San Shing Fastech |
| TBI Motion Technology |
San Shing and TBI Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Shing and TBI Motion
The main advantage of trading using opposite San Shing and TBI Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Shing position performs unexpectedly, TBI Motion 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 TBI Motion will offset losses from the drop in TBI Motion's long position.| San Shing vs. Yang Ming Marine | San Shing vs. Wan Hai Lines | San Shing vs. U Ming Marine Transport | San Shing vs. Taiwan Navigation Co |
| TBI Motion vs. Hiwin Technologies Corp | TBI Motion vs. Airtac International Group | TBI Motion vs. Taiwan Chelic Corp | TBI Motion vs. Kung Long Batteries |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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