Correlation Between Insyde Software and Shih Kuen
Can any of the company-specific risk be diversified away by investing in both Insyde Software and Shih Kuen 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 Insyde Software and Shih Kuen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insyde Software and Shih Kuen Plastics, you can compare the effects of market volatilities on Insyde Software and Shih Kuen 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 Insyde Software with a short position of Shih Kuen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insyde Software and Shih Kuen.
Diversification Opportunities for Insyde Software and Shih Kuen
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Insyde and Shih is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Insyde Software and Shih Kuen Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shih Kuen Plastics and Insyde Software 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 Insyde Software are associated (or correlated) with Shih Kuen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shih Kuen Plastics has no effect on the direction of Insyde Software i.e., Insyde Software and Shih Kuen go up and down completely randomly.
Pair Corralation between Insyde Software and Shih Kuen
Assuming the 90 days trading horizon Insyde Software is expected to generate 2.83 times more return on investment than Shih Kuen. However, Insyde Software is 2.83 times more volatile than Shih Kuen Plastics. It trades about 0.06 of its potential returns per unit of risk. Shih Kuen Plastics is currently generating about -0.02 per unit of risk. If you would invest 36,950 in Insyde Software on September 1, 2024 and sell it today you would earn a total of 9,850 from holding Insyde Software or generate 26.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insyde Software vs. Shih Kuen Plastics
Performance |
| Timeline |
| Insyde Software |
| Shih Kuen Plastics |
Insyde Software and Shih Kuen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insyde Software and Shih Kuen
The main advantage of trading using opposite Insyde Software and Shih Kuen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insyde Software position performs unexpectedly, Shih Kuen 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 Shih Kuen will offset losses from the drop in Shih Kuen's long position.| Insyde Software vs. Quanta Storage | Insyde Software vs. Eagle Cold Storage | Insyde Software vs. Ton Yi Industrial | Insyde Software vs. Coxon Precise Industrial |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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