Correlation Between PlayNitride and Sheng Yu
Can any of the company-specific risk be diversified away by investing in both PlayNitride and Sheng Yu 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 PlayNitride and Sheng Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayNitride and Sheng Yu Steel, you can compare the effects of market volatilities on PlayNitride and Sheng Yu 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 PlayNitride with a short position of Sheng Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayNitride and Sheng Yu.
Diversification Opportunities for PlayNitride and Sheng Yu
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PlayNitride and Sheng is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PlayNitride and Sheng Yu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sheng Yu Steel and PlayNitride 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 PlayNitride are associated (or correlated) with Sheng Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sheng Yu Steel has no effect on the direction of PlayNitride i.e., PlayNitride and Sheng Yu go up and down completely randomly.
Pair Corralation between PlayNitride and Sheng Yu
Assuming the 90 days trading horizon PlayNitride is expected to generate 2.27 times more return on investment than Sheng Yu. However, PlayNitride is 2.27 times more volatile than Sheng Yu Steel. It trades about 0.04 of its potential returns per unit of risk. Sheng Yu Steel is currently generating about 0.0 per unit of risk. If you would invest 10,500 in PlayNitride on September 2, 2024 and sell it today you would earn a total of 3,550 from holding PlayNitride or generate 33.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
PlayNitride vs. Sheng Yu Steel
Performance |
| Timeline |
| PlayNitride |
| Sheng Yu Steel |
PlayNitride and Sheng Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayNitride and Sheng Yu
The main advantage of trading using opposite PlayNitride and Sheng Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayNitride position performs unexpectedly, Sheng Yu 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 Sheng Yu will offset losses from the drop in Sheng Yu's long position.| PlayNitride vs. Taiwan Semiconductor Manufacturing | PlayNitride vs. Hon Hai Precision | PlayNitride vs. MediaTek | PlayNitride vs. Chunghwa Telecom Co |
| Sheng Yu vs. Yieh Phui Enterprise | Sheng Yu vs. Tung Ho Steel | Sheng Yu vs. Feng Hsin Steel | Sheng Yu vs. Chung Hung Steel |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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