Correlation Between I Sheng and General Plastic
Can any of the company-specific risk be diversified away by investing in both I Sheng and General Plastic 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 I Sheng and General Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Sheng Electric Wire and General Plastic Industrial, you can compare the effects of market volatilities on I Sheng and General Plastic 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 I Sheng with a short position of General Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Sheng and General Plastic.
Diversification Opportunities for I Sheng and General Plastic
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 6115 and General is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding I Sheng Electric Wire and General Plastic Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Plastic Indu and I Sheng 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 I Sheng Electric Wire are associated (or correlated) with General Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Plastic Indu has no effect on the direction of I Sheng i.e., I Sheng and General Plastic go up and down completely randomly.
Pair Corralation between I Sheng and General Plastic
Assuming the 90 days trading horizon I Sheng Electric Wire is expected to generate 0.69 times more return on investment than General Plastic. However, I Sheng Electric Wire is 1.46 times less risky than General Plastic. It trades about -0.02 of its potential returns per unit of risk. General Plastic Industrial is currently generating about -0.06 per unit of risk. If you would invest 5,290 in I Sheng Electric Wire on September 2, 2024 and sell it today you would lose (40.00) from holding I Sheng Electric Wire or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Sheng Electric Wire vs. General Plastic Industrial
Performance |
| Timeline |
| I Sheng Electric |
| General Plastic Indu |
I Sheng and General Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Sheng and General Plastic
The main advantage of trading using opposite I Sheng and General Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Sheng position performs unexpectedly, General Plastic 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 General Plastic will offset losses from the drop in General Plastic's long position.| I Sheng vs. Unitech Computer Co | I Sheng vs. Far EasTone Telecommunications | I Sheng vs. Tai Tung Communication | I Sheng vs. Arima Communications Corp |
| General Plastic vs. I Sheng Electric Wire | General Plastic vs. LK Engineering Co | General Plastic vs. Aten International Co | General Plastic vs. Flytech Technology 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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