Correlation Between Shin Ruenn and LIWANLI Innovation
Can any of the company-specific risk be diversified away by investing in both Shin Ruenn and LIWANLI Innovation 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 LIWANLI Innovation 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 LIWANLI Innovation Co, you can compare the effects of market volatilities on Shin Ruenn and LIWANLI Innovation 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 LIWANLI Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Ruenn and LIWANLI Innovation.
Diversification Opportunities for Shin Ruenn and LIWANLI Innovation
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shin and LIWANLI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Shin Ruenn Development and LIWANLI Innovation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIWANLI Innovation 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 LIWANLI Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIWANLI Innovation has no effect on the direction of Shin Ruenn i.e., Shin Ruenn and LIWANLI Innovation go up and down completely randomly.
Pair Corralation between Shin Ruenn and LIWANLI Innovation
Assuming the 90 days trading horizon Shin Ruenn Development is expected to generate 1.53 times more return on investment than LIWANLI Innovation. However, Shin Ruenn is 1.53 times more volatile than LIWANLI Innovation Co. It trades about 0.07 of its potential returns per unit of risk. LIWANLI Innovation Co is currently generating about 0.03 per unit of risk. If you would invest 3,410 in Shin Ruenn Development on August 30, 2024 and sell it today you would earn a total of 2,990 from holding Shin Ruenn Development or generate 87.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Ruenn Development vs. LIWANLI Innovation Co
Performance |
| Timeline |
| Shin Ruenn Development |
| LIWANLI Innovation |
Shin Ruenn and LIWANLI Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Ruenn and LIWANLI Innovation
The main advantage of trading using opposite Shin Ruenn and LIWANLI Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Ruenn position performs unexpectedly, LIWANLI Innovation 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 LIWANLI Innovation will offset losses from the drop in LIWANLI Innovation'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 |
| LIWANLI Innovation vs. ALi Corp | LIWANLI Innovation vs. Altek Corp | LIWANLI Innovation vs. Edimax Technology Co | LIWANLI Innovation vs. ITE Tech |
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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