Correlation Between Tacheng Real and Shin Ruenn
Can any of the company-specific risk be diversified away by investing in both Tacheng Real and Shin Ruenn 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 Tacheng Real and Shin Ruenn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tacheng Real Estate and Shin Ruenn Development, you can compare the effects of market volatilities on Tacheng Real and Shin Ruenn 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 Tacheng Real with a short position of Shin Ruenn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tacheng Real and Shin Ruenn.
Diversification Opportunities for Tacheng Real and Shin Ruenn
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tacheng and Shin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tacheng Real Estate and Shin Ruenn Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Ruenn Development and Tacheng Real 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 Tacheng Real Estate are associated (or correlated) with Shin Ruenn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Ruenn Development has no effect on the direction of Tacheng Real i.e., Tacheng Real and Shin Ruenn go up and down completely randomly.
Pair Corralation between Tacheng Real and Shin Ruenn
Assuming the 90 days trading horizon Tacheng Real Estate is expected to generate 0.7 times more return on investment than Shin Ruenn. However, Tacheng Real Estate is 1.44 times less risky than Shin Ruenn. It trades about 0.29 of its potential returns per unit of risk. Shin Ruenn Development is currently generating about 0.11 per unit of risk. If you would invest 3,650 in Tacheng Real Estate on August 30, 2024 and sell it today you would earn a total of 460.00 from holding Tacheng Real Estate or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tacheng Real Estate vs. Shin Ruenn Development
Performance |
| Timeline |
| Tacheng Real Estate |
| Shin Ruenn Development |
Tacheng Real and Shin Ruenn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tacheng Real and Shin Ruenn
The main advantage of trading using opposite Tacheng Real and Shin Ruenn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tacheng Real position performs unexpectedly, Shin Ruenn 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 Ruenn will offset losses from the drop in Shin Ruenn's long position.| Tacheng Real vs. Highwealth Construction Corp | Tacheng Real vs. Kunyue Development Co | Tacheng Real vs. Leatec Fine Ceramics | Tacheng Real vs. Information Technology Total |
| Shin Ruenn vs. Thermaltake Technology Co | Shin Ruenn vs. HIM International Music | Shin Ruenn vs. Mercuries Life Insurance | Shin Ruenn vs. Hunya Foods 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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