Correlation Between Taiwan Secom and Shin Hai
Can any of the company-specific risk be diversified away by investing in both Taiwan Secom and Shin Hai 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 Taiwan Secom and Shin Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Secom Co and Shin Hai Gas, you can compare the effects of market volatilities on Taiwan Secom and Shin Hai 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 Taiwan Secom with a short position of Shin Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Secom and Shin Hai.
Diversification Opportunities for Taiwan Secom and Shin Hai
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taiwan and Shin is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Secom Co and Shin Hai Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Hai Gas and Taiwan Secom 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 Taiwan Secom Co are associated (or correlated) with Shin Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Hai Gas has no effect on the direction of Taiwan Secom i.e., Taiwan Secom and Shin Hai go up and down completely randomly.
Pair Corralation between Taiwan Secom and Shin Hai
Assuming the 90 days trading horizon Taiwan Secom Co is expected to generate 1.69 times more return on investment than Shin Hai. However, Taiwan Secom is 1.69 times more volatile than Shin Hai Gas. It trades about 0.03 of its potential returns per unit of risk. Shin Hai Gas is currently generating about -0.02 per unit of risk. If you would invest 11,700 in Taiwan Secom Co on September 3, 2024 and sell it today you would earn a total of 1,150 from holding Taiwan Secom Co or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Secom Co vs. Shin Hai Gas
Performance |
| Timeline |
| Taiwan Secom |
| Shin Hai Gas |
Taiwan Secom and Shin Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiwan Secom and Shin Hai
The main advantage of trading using opposite Taiwan Secom and Shin Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Secom position performs unexpectedly, Shin Hai 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 Hai will offset losses from the drop in Shin Hai's long position.| Taiwan Secom vs. Taiwan Shin Kong | Taiwan Secom vs. President Chain Store | Taiwan Secom vs. Yulon Finance Corp | Taiwan Secom vs. Giant Manufacturing Co |
| Shin Hai vs. Taiwan Secom Co | Shin Hai vs. Taiwan Shin Kong | Shin Hai vs. Taiwan Cogeneration Corp | Shin Hai vs. Shin Shin Natural |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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