Correlation Between Shih Wei and Scan D
Can any of the company-specific risk be diversified away by investing in both Shih Wei and Scan D 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 Shih Wei and Scan D into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shih Wei Navigation and Scan D, you can compare the effects of market volatilities on Shih Wei and Scan D 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 Shih Wei with a short position of Scan D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shih Wei and Scan D.
Diversification Opportunities for Shih Wei and Scan D
Very poor diversification
The 3 months correlation between Shih and Scan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shih Wei Navigation and Scan D in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scan D and Shih Wei 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 Shih Wei Navigation are associated (or correlated) with Scan D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scan D has no effect on the direction of Shih Wei i.e., Shih Wei and Scan D go up and down completely randomly.
Pair Corralation between Shih Wei and Scan D
Assuming the 90 days trading horizon Shih Wei Navigation is expected to under-perform the Scan D. In addition to that, Shih Wei is 1.67 times more volatile than Scan D. It trades about -0.16 of its total potential returns per unit of risk. Scan D is currently generating about -0.17 per unit of volatility. If you would invest 3,480 in Scan D on October 28, 2024 and sell it today you would lose (110.00) from holding Scan D or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shih Wei Navigation vs. Scan D
Performance |
| Timeline |
| Shih Wei Navigation |
| Scan D |
Shih Wei and Scan D Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shih Wei and Scan D
The main advantage of trading using opposite Shih Wei and Scan D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shih Wei position performs unexpectedly, Scan D 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 Scan D will offset losses from the drop in Scan D's long position.| Shih Wei vs. Sincere Navigation Corp | Shih Wei vs. U Ming Marine Transport | Shih Wei vs. Taiwan Navigation Co | Shih Wei vs. Wan Hai Lines |
| Scan D vs. Arbor Technology | Scan D vs. Grand Ocean Retail | Scan D vs. Louisa Professional Coffee | Scan D vs. Elitegroup Computer Systems |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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