Correlation Between Shinih Enterprise and Les Enphants
Can any of the company-specific risk be diversified away by investing in both Shinih Enterprise and Les Enphants 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 Les Enphants 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 Les Enphants Co, you can compare the effects of market volatilities on Shinih Enterprise and Les Enphants 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 Les Enphants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinih Enterprise and Les Enphants.
Diversification Opportunities for Shinih Enterprise and Les Enphants
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shinih and Les is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Shinih Enterprise Co and Les Enphants Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Enphants 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 Les Enphants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Enphants has no effect on the direction of Shinih Enterprise i.e., Shinih Enterprise and Les Enphants go up and down completely randomly.
Pair Corralation between Shinih Enterprise and Les Enphants
Assuming the 90 days trading horizon Shinih Enterprise is expected to generate 11.52 times less return on investment than Les Enphants. But when comparing it to its historical volatility, Shinih Enterprise Co is 2.99 times less risky than Les Enphants. It trades about 0.01 of its potential returns per unit of risk. Les Enphants Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 666.00 in Les Enphants Co on September 3, 2024 and sell it today you would earn a total of 200.00 from holding Les Enphants Co or generate 30.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinih Enterprise Co vs. Les Enphants Co
Performance |
| Timeline |
| Shinih Enterprise |
| Les Enphants |
Shinih Enterprise and Les Enphants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinih Enterprise and Les Enphants
The main advantage of trading using opposite Shinih Enterprise and Les Enphants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinih Enterprise position performs unexpectedly, Les Enphants 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 Les Enphants will offset losses from the drop in Les Enphants' 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 |
| Les Enphants vs. Far Eastern Department | Les Enphants vs. Shin Shin Co | Les Enphants vs. First Hotel Co | Les Enphants vs. Hung Sheng Construction |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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