Correlation Between Posiflex Technology and Shin Kong
Can any of the company-specific risk be diversified away by investing in both Posiflex Technology and Shin Kong 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 Posiflex Technology and Shin Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Posiflex Technology and Shin Kong Financial, you can compare the effects of market volatilities on Posiflex Technology and Shin Kong 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 Posiflex Technology with a short position of Shin Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and Shin Kong.
Diversification Opportunities for Posiflex Technology and Shin Kong
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Posiflex and Shin is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology and Shin Kong Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Kong Financial and Posiflex Technology 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 Posiflex Technology are associated (or correlated) with Shin Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Kong Financial has no effect on the direction of Posiflex Technology i.e., Posiflex Technology and Shin Kong go up and down completely randomly.
Pair Corralation between Posiflex Technology and Shin Kong
Assuming the 90 days trading horizon Posiflex Technology is expected to generate 14.42 times more return on investment than Shin Kong. However, Posiflex Technology is 14.42 times more volatile than Shin Kong Financial. It trades about 0.46 of its potential returns per unit of risk. Shin Kong Financial is currently generating about 0.14 per unit of risk. If you would invest 26,200 in Posiflex Technology on September 15, 2024 and sell it today you would earn a total of 7,600 from holding Posiflex Technology or generate 29.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Posiflex Technology vs. Shin Kong Financial
Performance |
| Timeline |
| Posiflex Technology |
| Shin Kong Financial |
Posiflex Technology and Shin Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posiflex Technology and Shin Kong
The main advantage of trading using opposite Posiflex Technology and Shin Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posiflex Technology position performs unexpectedly, Shin Kong 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 Shin Kong will offset losses from the drop in Shin Kong's long position.| Posiflex Technology vs. AU Optronics | Posiflex Technology vs. Innolux Corp | Posiflex Technology vs. Ruentex Development Co | Posiflex Technology vs. WiseChip Semiconductor |
| Shin Kong vs. Cathay Financial Holding | Shin Kong vs. Cathay Financial Holding | Shin Kong vs. Fubon Financial Holding | Shin Kong vs. CTBC Financial Holding |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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