Correlation Between Ton Yi and Shih Kuen
Can any of the company-specific risk be diversified away by investing in both Ton Yi and Shih Kuen 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 Ton Yi and Shih Kuen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ton Yi Industrial and Shih Kuen Plastics, you can compare the effects of market volatilities on Ton Yi and Shih Kuen 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 Ton Yi with a short position of Shih Kuen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ton Yi and Shih Kuen.
Diversification Opportunities for Ton Yi and Shih Kuen
Very weak diversification
The 3 months correlation between Ton and Shih is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ton Yi Industrial and Shih Kuen Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shih Kuen Plastics and Ton Yi 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 Ton Yi Industrial are associated (or correlated) with Shih Kuen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shih Kuen Plastics has no effect on the direction of Ton Yi i.e., Ton Yi and Shih Kuen go up and down completely randomly.
Pair Corralation between Ton Yi and Shih Kuen
Assuming the 90 days trading horizon Ton Yi Industrial is expected to generate 1.28 times more return on investment than Shih Kuen. However, Ton Yi is 1.28 times more volatile than Shih Kuen Plastics. It trades about -0.13 of its potential returns per unit of risk. Shih Kuen Plastics is currently generating about -0.23 per unit of risk. If you would invest 1,645 in Ton Yi Industrial on August 30, 2024 and sell it today you would lose (85.00) from holding Ton Yi Industrial or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ton Yi Industrial vs. Shih Kuen Plastics
Performance |
| Timeline |
| Ton Yi Industrial |
| Shih Kuen Plastics |
Ton Yi and Shih Kuen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ton Yi and Shih Kuen
The main advantage of trading using opposite Ton Yi and Shih Kuen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ton Yi position performs unexpectedly, Shih Kuen 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 Shih Kuen will offset losses from the drop in Shih Kuen's long position.| Ton Yi vs. Far Eastern Department | Ton Yi vs. Chang Hwa Commercial | Ton Yi vs. Zinwell | Ton Yi vs. Evergreen International Storage |
| Shih Kuen vs. Chain Chon Industrial | Shih Kuen vs. Camellia Metal Co | Shih Kuen vs. Sunspring Metal Corp | Shih Kuen vs. Insyde Software |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |