Correlation Between Alphabet and Shin Kong
Can any of the company-specific risk be diversified away by investing in both Alphabet and Shin Kong 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 Alphabet and Shin Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Shin Kong Financial, you can compare the effects of market volatilities on Alphabet and Shin Kong 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 Alphabet with a short position of Shin Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Shin Kong.
Diversification Opportunities for Alphabet and Shin Kong
Pay attention - limited upside
The 3 months correlation between Alphabet and Shin is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Shin Kong Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Kong Financial and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Shin Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Kong Financial has no effect on the direction of Alphabet i.e., Alphabet and Shin Kong go up and down completely randomly.
Pair Corralation between Alphabet and Shin Kong
Given the investment horizon of 90 days Alphabet is expected to generate 2.88 times less return on investment than Shin Kong. In addition to that, Alphabet is 3.35 times more volatile than Shin Kong Financial. It trades about 0.02 of its total potential returns per unit of risk. Shin Kong Financial is currently generating about 0.24 per unit of volatility. If you would invest 1,140 in Shin Kong Financial on August 28, 2024 and sell it today you would earn a total of 35.00 from holding Shin Kong Financial or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Shin Kong Financial
Performance |
| Timeline |
| Alphabet Class C |
| Shin Kong Financial |
Alphabet and Shin Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Shin Kong
The main advantage of trading using opposite Alphabet and Shin Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Shin Kong 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 Shin Kong will offset losses from the drop in Shin Kong's long position.The idea behind Alphabet Inc Class C and Shin Kong Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Shin Kong vs. Cathay Financial Holding | Shin Kong vs. Taishin Financial Holding | Shin Kong vs. Fubon Financial Holding | Shin Kong vs. CTBC Financial Holding |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |