Correlation Between Shinih Enterprise and New Palace
Can any of the company-specific risk be diversified away by investing in both Shinih Enterprise and New Palace 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 New Palace 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 New Palace International, you can compare the effects of market volatilities on Shinih Enterprise and New Palace 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 New Palace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinih Enterprise and New Palace.
Diversification Opportunities for Shinih Enterprise and New Palace
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinih and New is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Shinih Enterprise Co and New Palace International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Palace International 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 New Palace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Palace International has no effect on the direction of Shinih Enterprise i.e., Shinih Enterprise and New Palace go up and down completely randomly.
Pair Corralation between Shinih Enterprise and New Palace
Assuming the 90 days trading horizon Shinih Enterprise Co is expected to under-perform the New Palace. But the stock apears to be less risky and, when comparing its historical volatility, Shinih Enterprise Co is 2.72 times less risky than New Palace. The stock trades about -0.17 of its potential returns per unit of risk. The New Palace International is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,245 in New Palace International on September 12, 2024 and sell it today you would earn a total of 185.00 from holding New Palace International or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinih Enterprise Co vs. New Palace International
Performance |
| Timeline |
| Shinih Enterprise |
| New Palace International |
Shinih Enterprise and New Palace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinih Enterprise and New Palace
The main advantage of trading using opposite Shinih Enterprise and New Palace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinih Enterprise position performs unexpectedly, New Palace 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 New Palace will offset losses from the drop in New Palace's long position.| Shinih Enterprise vs. Feng Tay Enterprises | Shinih Enterprise vs. Ruentex Development Co | Shinih Enterprise vs. WiseChip Semiconductor | Shinih Enterprise vs. Novatek Microelectronics Corp |
| New Palace vs. Shui Mu International Co | New Palace vs. First Hotel Co | New Palace vs. Jinli Group Holdings | New Palace vs. Super Dragon Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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