Correlation Between Shin Ruenn and Wan Hai
Can any of the company-specific risk be diversified away by investing in both Shin Ruenn and Wan Hai 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 Shin Ruenn and Wan Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Ruenn Development and Wan Hai Lines, you can compare the effects of market volatilities on Shin Ruenn and Wan Hai 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 Shin Ruenn with a short position of Wan Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Ruenn and Wan Hai.
Diversification Opportunities for Shin Ruenn and Wan Hai
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shin and Wan is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shin Ruenn Development and Wan Hai Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wan Hai Lines and Shin Ruenn 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 Shin Ruenn Development are associated (or correlated) with Wan Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wan Hai Lines has no effect on the direction of Shin Ruenn i.e., Shin Ruenn and Wan Hai go up and down completely randomly.
Pair Corralation between Shin Ruenn and Wan Hai
Assuming the 90 days trading horizon Shin Ruenn is expected to generate 1.33 times less return on investment than Wan Hai. But when comparing it to its historical volatility, Shin Ruenn Development is 1.25 times less risky than Wan Hai. It trades about 0.09 of its potential returns per unit of risk. Wan Hai Lines is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,860 in Wan Hai Lines on August 27, 2024 and sell it today you would earn a total of 500.00 from holding Wan Hai Lines or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Ruenn Development vs. Wan Hai Lines
Performance |
| Timeline |
| Shin Ruenn Development |
| Wan Hai Lines |
Shin Ruenn and Wan Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Ruenn and Wan Hai
The main advantage of trading using opposite Shin Ruenn and Wan Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Ruenn position performs unexpectedly, Wan Hai 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 Wan Hai will offset losses from the drop in Wan Hai's long position.| Shin Ruenn vs. Highwealth Construction Corp | Shin Ruenn vs. Kunyue Development Co | Shin Ruenn vs. Leatec Fine Ceramics | Shin Ruenn vs. Information Technology Total |
| Wan Hai vs. Sunny Friend Environmental | Wan Hai vs. TTET Union Corp | Wan Hai vs. ECOVE Environment Corp | Wan Hai vs. Yulon Finance Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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