Correlation Between Shanghai Commercial and Mega Financial
Can any of the company-specific risk be diversified away by investing in both Shanghai Commercial and Mega Financial 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 Shanghai Commercial and Mega Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai Commercial Savings and Mega Financial Holding, you can compare the effects of market volatilities on Shanghai Commercial and Mega Financial 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 Shanghai Commercial with a short position of Mega Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Commercial and Mega Financial.
Diversification Opportunities for Shanghai Commercial and Mega Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shanghai and Mega is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Commercial Savings and Mega Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Financial Holding and Shanghai Commercial 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 Shanghai Commercial Savings are associated (or correlated) with Mega Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Financial Holding has no effect on the direction of Shanghai Commercial i.e., Shanghai Commercial and Mega Financial go up and down completely randomly.
Pair Corralation between Shanghai Commercial and Mega Financial
Assuming the 90 days trading horizon Shanghai Commercial Savings is expected to under-perform the Mega Financial. In addition to that, Shanghai Commercial is 1.08 times more volatile than Mega Financial Holding. It trades about -0.28 of its total potential returns per unit of risk. Mega Financial Holding is currently generating about 0.14 per unit of volatility. If you would invest 3,925 in Mega Financial Holding on August 28, 2024 and sell it today you would earn a total of 90.00 from holding Mega Financial Holding or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shanghai Commercial Savings vs. Mega Financial Holding
Performance |
| Timeline |
| Shanghai Commercial |
| Mega Financial Holding |
Shanghai Commercial and Mega Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Commercial and Mega Financial
The main advantage of trading using opposite Shanghai Commercial and Mega Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Commercial position performs unexpectedly, Mega Financial 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 Mega Financial will offset losses from the drop in Mega Financial's long position.| Shanghai Commercial vs. Mega Financial Holding | Shanghai Commercial vs. Yuanta Financial Holdings | Shanghai Commercial vs. ESUN Financial Holding | Shanghai Commercial vs. Taiwan Cooperative Financial |
| Mega Financial vs. CTBC Financial Holding | Mega Financial vs. Fubon Financial Holding | Mega Financial vs. First Financial Holding | Mega Financial vs. Cathay Financial Holding |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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