Correlation Between Chief Telecom and Shinkong Insurance
Can any of the company-specific risk be diversified away by investing in both Chief Telecom and Shinkong Insurance 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 Chief Telecom and Shinkong Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chief Telecom and Shinkong Insurance Co, you can compare the effects of market volatilities on Chief Telecom and Shinkong Insurance 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 Chief Telecom with a short position of Shinkong Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chief Telecom and Shinkong Insurance.
Diversification Opportunities for Chief Telecom and Shinkong Insurance
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chief and Shinkong is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chief Telecom and Shinkong Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinkong Insurance and Chief Telecom 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 Chief Telecom are associated (or correlated) with Shinkong Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinkong Insurance has no effect on the direction of Chief Telecom i.e., Chief Telecom and Shinkong Insurance go up and down completely randomly.
Pair Corralation between Chief Telecom and Shinkong Insurance
Assuming the 90 days trading horizon Chief Telecom is expected to generate 1.72 times less return on investment than Shinkong Insurance. In addition to that, Chief Telecom is 1.22 times more volatile than Shinkong Insurance Co. It trades about 0.06 of its total potential returns per unit of risk. Shinkong Insurance Co is currently generating about 0.12 per unit of volatility. If you would invest 5,160 in Shinkong Insurance Co on September 2, 2024 and sell it today you would earn a total of 4,840 from holding Shinkong Insurance Co or generate 93.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Chief Telecom vs. Shinkong Insurance Co
Performance |
| Timeline |
| Chief Telecom |
| Shinkong Insurance |
Chief Telecom and Shinkong Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chief Telecom and Shinkong Insurance
The main advantage of trading using opposite Chief Telecom and Shinkong Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chief Telecom position performs unexpectedly, Shinkong Insurance 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 Shinkong Insurance will offset losses from the drop in Shinkong Insurance's long position.| Chief Telecom vs. Sunny Friend Environmental | Chief Telecom vs. Aspeed Technology | Chief Telecom vs. Standard Foods Corp | Chief Telecom vs. Realtek Semiconductor Corp |
| Shinkong Insurance vs. Central Reinsurance Corp | Shinkong Insurance vs. Huaku Development Co | Shinkong Insurance vs. Fubon Financial Holding | Shinkong Insurance vs. Chailease Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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