Correlation Between Progate and StShine Optical
Can any of the company-specific risk be diversified away by investing in both Progate and StShine Optical 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 Progate and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progate Group and StShine Optical Co, you can compare the effects of market volatilities on Progate and StShine Optical 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 Progate with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progate and StShine Optical.
Diversification Opportunities for Progate and StShine Optical
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Progate and StShine is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Progate Group and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and Progate 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 Progate Group are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of Progate i.e., Progate and StShine Optical go up and down completely randomly.
Pair Corralation between Progate and StShine Optical
Assuming the 90 days trading horizon Progate Group is expected to generate 3.15 times more return on investment than StShine Optical. However, Progate is 3.15 times more volatile than StShine Optical Co. It trades about 0.05 of its potential returns per unit of risk. StShine Optical Co is currently generating about 0.0 per unit of risk. If you would invest 9,393 in Progate Group on September 4, 2024 and sell it today you would earn a total of 5,957 from holding Progate Group or generate 63.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progate Group vs. StShine Optical Co
Performance |
| Timeline |
| Progate Group |
| StShine Optical |
Progate and StShine Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progate and StShine Optical
The main advantage of trading using opposite Progate and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progate position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.| Progate vs. Taiwan Semiconductor Manufacturing | Progate vs. Hon Hai Precision | Progate vs. MediaTek | Progate vs. Chunghwa Telecom Co |
| StShine Optical vs. Landis Taipei Hotel | StShine Optical vs. Oceanic Beverages Co | StShine Optical vs. Far EasTone Telecommunications | StShine Optical vs. Ambassador Hotel |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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