Correlation Between Shin Ruenn and Grand Plastic
Can any of the company-specific risk be diversified away by investing in both Shin Ruenn and Grand Plastic 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 Grand Plastic 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 Grand Plastic Technology, you can compare the effects of market volatilities on Shin Ruenn and Grand Plastic 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 Grand Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Ruenn and Grand Plastic.
Diversification Opportunities for Shin Ruenn and Grand Plastic
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shin and Grand is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shin Ruenn Development and Grand Plastic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Plastic Technology 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 Grand Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Plastic Technology has no effect on the direction of Shin Ruenn i.e., Shin Ruenn and Grand Plastic go up and down completely randomly.
Pair Corralation between Shin Ruenn and Grand Plastic
Assuming the 90 days trading horizon Shin Ruenn is expected to generate 3.09 times less return on investment than Grand Plastic. But when comparing it to its historical volatility, Shin Ruenn Development is 1.71 times less risky than Grand Plastic. It trades about 0.07 of its potential returns per unit of risk. Grand Plastic Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 22,839 in Grand Plastic Technology on August 30, 2024 and sell it today you would earn a total of 141,661 from holding Grand Plastic Technology or generate 620.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Ruenn Development vs. Grand Plastic Technology
Performance |
| Timeline |
| Shin Ruenn Development |
| Grand Plastic Technology |
Shin Ruenn and Grand Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Ruenn and Grand Plastic
The main advantage of trading using opposite Shin Ruenn and Grand Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Ruenn position performs unexpectedly, Grand Plastic 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 Grand Plastic will offset losses from the drop in Grand Plastic'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 |
| Grand Plastic vs. Powertech Technology | Grand Plastic vs. Formosa Sumco Technology | Grand Plastic vs. Radiant Opto Electronics Corp | Grand Plastic vs. Faraday Technology 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 Stocks Directory module to find actively traded stocks across global markets.
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