Correlation Between Career Technology and Shin Zu
Can any of the company-specific risk be diversified away by investing in both Career Technology and Shin Zu 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 Career Technology and Shin Zu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Career Technology MFG and Shin Zu Shing, you can compare the effects of market volatilities on Career Technology and Shin Zu 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 Career Technology with a short position of Shin Zu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Career Technology and Shin Zu.
Diversification Opportunities for Career Technology and Shin Zu
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Career and Shin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Career Technology MFG and Shin Zu Shing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Zu Shing and Career Technology 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 Career Technology MFG are associated (or correlated) with Shin Zu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Zu Shing has no effect on the direction of Career Technology i.e., Career Technology and Shin Zu go up and down completely randomly.
Pair Corralation between Career Technology and Shin Zu
Assuming the 90 days trading horizon Career Technology MFG is expected to under-perform the Shin Zu. But the stock apears to be less risky and, when comparing its historical volatility, Career Technology MFG is 2.3 times less risky than Shin Zu. The stock trades about -0.4 of its potential returns per unit of risk. The Shin Zu Shing is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 17,500 in Shin Zu Shing on September 3, 2024 and sell it today you would earn a total of 1,850 from holding Shin Zu Shing or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Career Technology MFG vs. Shin Zu Shing
Performance |
| Timeline |
| Career Technology MFG |
| Shin Zu Shing |
Career Technology and Shin Zu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Career Technology and Shin Zu
The main advantage of trading using opposite Career Technology and Shin Zu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Career Technology position performs unexpectedly, Shin Zu 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 Shin Zu will offset losses from the drop in Shin Zu's long position.| Career Technology vs. Taiwan Semiconductor Manufacturing | Career Technology vs. Yang Ming Marine | Career Technology vs. ASE Industrial Holding | Career Technology vs. AU Optronics |
| Shin Zu vs. Catcher Technology Co | Shin Zu vs. Tripod Technology Corp | Shin Zu vs. Chicony Electronics Co | Shin Zu vs. Kinsus Interconnect Technology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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