Correlation Between Taiwan Weighted and Shin Shin
Can any of the company-specific risk be diversified away by investing in both Taiwan Weighted and Shin Shin 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 Taiwan Weighted and Shin Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiwan Weighted and Shin Shin Co, you can compare the effects of market volatilities on Taiwan Weighted and Shin Shin 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 Taiwan Weighted with a short position of Shin Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Weighted and Shin Shin.
Diversification Opportunities for Taiwan Weighted and Shin Shin
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taiwan and Shin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Weighted and Shin Shin Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Shin and Taiwan Weighted 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 Taiwan Weighted are associated (or correlated) with Shin Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Shin has no effect on the direction of Taiwan Weighted i.e., Taiwan Weighted and Shin Shin go up and down completely randomly.
Pair Corralation between Taiwan Weighted and Shin Shin
Assuming the 90 days trading horizon Taiwan Weighted is expected to generate 1.4 times more return on investment than Shin Shin. However, Taiwan Weighted is 1.4 times more volatile than Shin Shin Co. It trades about 0.05 of its potential returns per unit of risk. Shin Shin Co is currently generating about -0.01 per unit of risk. If you would invest 2,052,331 in Taiwan Weighted on September 3, 2024 and sell it today you would earn a total of 173,919 from holding Taiwan Weighted or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.62% |
| Values | Daily Returns |
Taiwan Weighted vs. Shin Shin Co
Performance |
| Timeline |
Taiwan Weighted and Shin Shin Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Weighted
Pair trading matchups for Taiwan Weighted
Shin Shin Co
Pair trading matchups for Shin Shin
Pair Trading with Taiwan Weighted and Shin Shin
The main advantage of trading using opposite Taiwan Weighted and Shin Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Weighted position performs unexpectedly, Shin Shin 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 Shin will offset losses from the drop in Shin Shin's long position.| Taiwan Weighted vs. Min Aik Technology | Taiwan Weighted vs. CHINA DEVELOPMENT FINANCIAL | Taiwan Weighted vs. Mega Financial Holding | Taiwan Weighted vs. Taishin Financial Holding |
| Shin Shin vs. Standard Foods Corp | Shin Shin vs. TTET Union Corp | Shin Shin vs. Uni President Enterprises Corp | Shin Shin vs. Charoen Pokphand Enterprise |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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