Correlation Between Grand Ocean and Shinkong Insurance
Can any of the company-specific risk be diversified away by investing in both Grand Ocean 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 Grand Ocean and Shinkong Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Ocean Retail and Shinkong Insurance Co, you can compare the effects of market volatilities on Grand Ocean 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 Grand Ocean with a short position of Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and Shinkong Insurance.
Diversification Opportunities for Grand Ocean and Shinkong Insurance
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grand and Shinkong is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and Grand Ocean 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 Grand Ocean Retail 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 Grand Ocean i.e., Grand Ocean and Shinkong Insurance go up and down completely randomly.
Pair Corralation between Grand Ocean and Shinkong Insurance
Assuming the 90 days trading horizon Grand Ocean Retail is expected to generate 4.19 times more return on investment than Shinkong Insurance. However, Grand Ocean is 4.19 times more volatile than Shinkong Insurance Co. It trades about 0.07 of its potential returns per unit of risk. Shinkong Insurance Co is currently generating about 0.0 per unit of risk. If you would invest 1,170 in Grand Ocean Retail on September 2, 2024 and sell it today you would earn a total of 55.00 from holding Grand Ocean Retail or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Ocean Retail vs. Shinkong Insurance Co
Performance |
| Timeline |
| Grand Ocean Retail |
| Shinkong Insurance |
Grand Ocean and Shinkong Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Ocean and Shinkong Insurance
The main advantage of trading using opposite Grand Ocean and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean 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.| Grand Ocean vs. First Steamship Co | Grand Ocean vs. Far Eastern Department | Grand Ocean vs. LongDa Construction Development | Grand Ocean vs. Collins Co |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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