Correlation Between New Palace and Shinih Enterprise
Can any of the company-specific risk be diversified away by investing in both New Palace and Shinih Enterprise 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 New Palace and Shinih Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Palace International and Shinih Enterprise Co, you can compare the effects of market volatilities on New Palace and Shinih Enterprise 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 New Palace with a short position of Shinih Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Palace and Shinih Enterprise.
Diversification Opportunities for New Palace and Shinih Enterprise
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Shinih is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding New Palace International and Shinih Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinih Enterprise and New Palace 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 New Palace International are associated (or correlated) with Shinih Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinih Enterprise has no effect on the direction of New Palace i.e., New Palace and Shinih Enterprise go up and down completely randomly.
Pair Corralation between New Palace and Shinih Enterprise
Assuming the 90 days trading horizon New Palace International is expected to generate 2.72 times more return on investment than Shinih Enterprise. However, New Palace is 2.72 times more volatile than Shinih Enterprise Co. It trades about 0.3 of its potential returns per unit of risk. Shinih Enterprise Co is currently generating about -0.17 per unit of risk. If you would invest 2,245 in New Palace International on September 12, 2024 and sell it today you would earn a total of 185.00 from holding New Palace International or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Palace International vs. Shinih Enterprise Co
Performance |
| Timeline |
| New Palace International |
| Shinih Enterprise |
New Palace and Shinih Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Palace and Shinih Enterprise
The main advantage of trading using opposite New Palace and Shinih Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Palace position performs unexpectedly, Shinih Enterprise 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 Shinih Enterprise will offset losses from the drop in Shinih Enterprise's long position.| New Palace vs. Shui Mu International Co | New Palace vs. First Hotel Co | New Palace vs. Jinli Group Holdings | New Palace vs. Super Dragon Technology |
| Shinih Enterprise vs. Feng Tay Enterprises | Shinih Enterprise vs. Ruentex Development Co | Shinih Enterprise vs. WiseChip Semiconductor | Shinih Enterprise vs. Novatek Microelectronics Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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