Correlation Between Shinih Enterprise and Tainan Spinning
Can any of the company-specific risk be diversified away by investing in both Shinih Enterprise and Tainan Spinning 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 Shinih Enterprise and Tainan Spinning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinih Enterprise Co and Tainan Spinning Co, you can compare the effects of market volatilities on Shinih Enterprise and Tainan Spinning 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 Shinih Enterprise with a short position of Tainan Spinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinih Enterprise and Tainan Spinning.
Diversification Opportunities for Shinih Enterprise and Tainan Spinning
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinih and Tainan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Shinih Enterprise Co and Tainan Spinning Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tainan Spinning and Shinih Enterprise 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 Shinih Enterprise Co are associated (or correlated) with Tainan Spinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tainan Spinning has no effect on the direction of Shinih Enterprise i.e., Shinih Enterprise and Tainan Spinning go up and down completely randomly.
Pair Corralation between Shinih Enterprise and Tainan Spinning
Assuming the 90 days trading horizon Shinih Enterprise Co is expected to generate 0.84 times more return on investment than Tainan Spinning. However, Shinih Enterprise Co is 1.2 times less risky than Tainan Spinning. It trades about 0.01 of its potential returns per unit of risk. Tainan Spinning Co is currently generating about -0.01 per unit of risk. If you would invest 2,045 in Shinih Enterprise Co on September 5, 2024 and sell it today you would earn a total of 10.00 from holding Shinih Enterprise Co or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinih Enterprise Co vs. Tainan Spinning Co
Performance |
| Timeline |
| Shinih Enterprise |
| Tainan Spinning |
Shinih Enterprise and Tainan Spinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinih Enterprise and Tainan Spinning
The main advantage of trading using opposite Shinih Enterprise and Tainan Spinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinih Enterprise position performs unexpectedly, Tainan Spinning 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 Tainan Spinning will offset losses from the drop in Tainan Spinning's long position.| Shinih Enterprise vs. Ton Yi Industrial | Shinih Enterprise vs. Super Dragon Technology | Shinih Enterprise vs. Min Aik Technology | Shinih Enterprise vs. Hung Sheng Construction |
| Tainan Spinning vs. Lealea Enterprise Co | Tainan Spinning vs. China Petrochemical Development | Tainan Spinning vs. Li Peng Enterprise | Tainan Spinning vs. Oriental Union Chemical |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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