Correlation Between Song Ho and Shinkong Insurance
Can any of the company-specific risk be diversified away by investing in both Song Ho 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 Song Ho and Shinkong Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Ho Industrial and Shinkong Insurance Co, you can compare the effects of market volatilities on Song Ho 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 Song Ho with a short position of Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Ho and Shinkong Insurance.
Diversification Opportunities for Song Ho and Shinkong Insurance
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Song and Shinkong is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Song Ho Industrial and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and Song Ho 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 Song Ho Industrial 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 Song Ho i.e., Song Ho and Shinkong Insurance go up and down completely randomly.
Pair Corralation between Song Ho and Shinkong Insurance
Assuming the 90 days trading horizon Song Ho Industrial is expected to generate 0.37 times more return on investment than Shinkong Insurance. However, Song Ho Industrial is 2.68 times less risky than Shinkong Insurance. It trades about 0.42 of its potential returns per unit of risk. Shinkong Insurance Co is currently generating about -0.11 per unit of risk. If you would invest 2,725 in Song Ho Industrial on November 28, 2024 and sell it today you would earn a total of 75.00 from holding Song Ho Industrial or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Song Ho Industrial vs. Shinkong Insurance Co
Performance |
| Timeline |
| Song Ho Industrial |
| Shinkong Insurance |
Song Ho and Shinkong Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Ho and Shinkong Insurance
The main advantage of trading using opposite Song Ho and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Ho 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.| Song Ho vs. Compal Broadband Networks | Song Ho vs. Farglory FTZ Investment | Song Ho vs. Dimerco Data System | Song Ho vs. PChome Online |
| Shinkong Insurance vs. Central Reinsurance Corp | Shinkong Insurance vs. Huaku Development Co | Shinkong Insurance vs. Fubon Financial Holding | Shinkong Insurance vs. Chailease Holding 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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