Correlation Between Shanghai Commercial and Shieh Yih
Can any of the company-specific risk be diversified away by investing in both Shanghai Commercial and Shieh Yih 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 Shieh Yih 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 Shieh Yih Machinery, you can compare the effects of market volatilities on Shanghai Commercial and Shieh Yih 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 Shieh Yih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Commercial and Shieh Yih.
Diversification Opportunities for Shanghai Commercial and Shieh Yih
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shanghai and Shieh is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Commercial Savings and Shieh Yih Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shieh Yih Machinery 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 Shieh Yih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shieh Yih Machinery has no effect on the direction of Shanghai Commercial i.e., Shanghai Commercial and Shieh Yih go up and down completely randomly.
Pair Corralation between Shanghai Commercial and Shieh Yih
Assuming the 90 days trading horizon Shanghai Commercial Savings is expected to under-perform the Shieh Yih. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Commercial Savings is 2.43 times less risky than Shieh Yih. The stock trades about -0.1 of its potential returns per unit of risk. The Shieh Yih Machinery is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 3,225 in Shieh Yih Machinery on December 5, 2024 and sell it today you would earn a total of 880.00 from holding Shieh Yih Machinery or generate 27.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Commercial Savings vs. Shieh Yih Machinery
Performance |
| Timeline |
| Shanghai Commercial |
| Shieh Yih Machinery |
Shanghai Commercial and Shieh Yih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Commercial and Shieh Yih
The main advantage of trading using opposite Shanghai Commercial and Shieh Yih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Commercial position performs unexpectedly, Shieh Yih 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 Shieh Yih will offset losses from the drop in Shieh Yih'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 |
| Shieh Yih vs. Rafael Microelectronics | Shieh Yih vs. Microelectronics Technology | Shieh Yih vs. Chinese Maritime Transport | Shieh Yih vs. LandMark Optoelectronics |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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