Correlation Between TUL and Shinkong Insurance
Can any of the company-specific risk be diversified away by investing in both TUL 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 TUL and Shinkong Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TUL Corporation and Shinkong Insurance Co, you can compare the effects of market volatilities on TUL 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 TUL with a short position of Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of TUL and Shinkong Insurance.
Diversification Opportunities for TUL and Shinkong Insurance
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TUL and Shinkong is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding TUL Corp. and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and TUL 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 TUL Corporation 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 TUL i.e., TUL and Shinkong Insurance go up and down completely randomly.
Pair Corralation between TUL and Shinkong Insurance
Assuming the 90 days trading horizon TUL Corporation is expected to under-perform the Shinkong Insurance. In addition to that, TUL is 1.72 times more volatile than Shinkong Insurance Co. It trades about -0.03 of its total potential returns per unit of risk. Shinkong Insurance Co is currently generating about 0.13 per unit of volatility. If you would invest 5,320 in Shinkong Insurance Co on September 12, 2024 and sell it today you would earn a total of 4,930 from holding Shinkong Insurance Co or generate 92.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TUL Corp. vs. Shinkong Insurance Co
Performance |
| Timeline |
| TUL Corporation |
| Shinkong Insurance |
TUL and Shinkong Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TUL and Shinkong Insurance
The main advantage of trading using opposite TUL and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TUL 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.| TUL vs. Chernan Metal Industrial | TUL vs. Dimerco Data System | TUL vs. Mitake Information | TUL vs. Feng Ching Metal |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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