Correlation Between Shin Shin and National Petroleum
Can any of the company-specific risk be diversified away by investing in both Shin Shin and National Petroleum 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 Shin Shin and National Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Shin Natural and National Petroleum Co, you can compare the effects of market volatilities on Shin Shin and National Petroleum 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 Shin Shin with a short position of National Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Shin and National Petroleum.
Diversification Opportunities for Shin Shin and National Petroleum
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shin and National is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Shin Shin Natural and National Petroleum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Petroleum and Shin Shin 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 Shin Shin Natural are associated (or correlated) with National Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Petroleum has no effect on the direction of Shin Shin i.e., Shin Shin and National Petroleum go up and down completely randomly.
Pair Corralation between Shin Shin and National Petroleum
Assuming the 90 days trading horizon Shin Shin Natural is expected to generate 0.78 times more return on investment than National Petroleum. However, Shin Shin Natural is 1.28 times less risky than National Petroleum. It trades about -0.13 of its potential returns per unit of risk. National Petroleum Co is currently generating about -0.24 per unit of risk. If you would invest 4,080 in Shin Shin Natural on September 12, 2024 and sell it today you would lose (70.00) from holding Shin Shin Natural or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Shin Natural vs. National Petroleum Co
Performance |
| Timeline |
| Shin Shin Natural |
| National Petroleum |
Shin Shin and National Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin Shin and National Petroleum
The main advantage of trading using opposite Shin Shin and National Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Shin position performs unexpectedly, National Petroleum 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 National Petroleum will offset losses from the drop in National Petroleum's long position.| Shin Shin vs. Great Taipei Gas | Shin Shin vs. Shin Hai Gas | Shin Shin vs. Taiwan Secom Co | Shin Shin vs. Hsin Kao Gas |
| National Petroleum vs. Taiwan Shin Kong | National Petroleum vs. Taiwan Secom Co | National Petroleum vs. Great Taipei Gas | National Petroleum vs. CTCI 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |