Correlation Between Giant Manufacturing and Sinphar Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Giant Manufacturing and Sinphar Pharmaceutical 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 Giant Manufacturing and Sinphar Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giant Manufacturing Co and Sinphar Pharmaceutical Co, you can compare the effects of market volatilities on Giant Manufacturing and Sinphar Pharmaceutical 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 Giant Manufacturing with a short position of Sinphar Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giant Manufacturing and Sinphar Pharmaceutical.
Diversification Opportunities for Giant Manufacturing and Sinphar Pharmaceutical
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Giant and Sinphar is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Giant Manufacturing Co and Sinphar Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinphar Pharmaceutical and Giant Manufacturing 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 Giant Manufacturing Co are associated (or correlated) with Sinphar Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinphar Pharmaceutical has no effect on the direction of Giant Manufacturing i.e., Giant Manufacturing and Sinphar Pharmaceutical go up and down completely randomly.
Pair Corralation between Giant Manufacturing and Sinphar Pharmaceutical
Assuming the 90 days trading horizon Giant Manufacturing Co is expected to under-perform the Sinphar Pharmaceutical. In addition to that, Giant Manufacturing is 1.66 times more volatile than Sinphar Pharmaceutical Co. It trades about -0.02 of its total potential returns per unit of risk. Sinphar Pharmaceutical Co is currently generating about -0.02 per unit of volatility. If you would invest 3,335 in Sinphar Pharmaceutical Co on September 4, 2024 and sell it today you would lose (250.00) from holding Sinphar Pharmaceutical Co or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Giant Manufacturing Co vs. Sinphar Pharmaceutical Co
Performance |
| Timeline |
| Giant Manufacturing |
| Sinphar Pharmaceutical |
Giant Manufacturing and Sinphar Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giant Manufacturing and Sinphar Pharmaceutical
The main advantage of trading using opposite Giant Manufacturing and Sinphar Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giant Manufacturing position performs unexpectedly, Sinphar Pharmaceutical 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 Sinphar Pharmaceutical will offset losses from the drop in Sinphar Pharmaceutical's long position.| Giant Manufacturing vs. Merida Industry Co | Giant Manufacturing vs. President Chain Store | Giant Manufacturing vs. Cheng Shin Rubber | Giant Manufacturing vs. Uni President Enterprises Corp |
| Sinphar Pharmaceutical vs. Abnova Taiwan Corp | Sinphar Pharmaceutical vs. YungShin Global Holding | Sinphar Pharmaceutical vs. Phytohealth Corp | Sinphar Pharmaceutical vs. Wellell |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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