Correlation Between Shinkong Insurance and Vivotek

Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Vivotek 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 Shinkong Insurance and Vivotek into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shinkong Insurance Co and Vivotek, you can compare the effects of market volatilities on Shinkong Insurance and Vivotek 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 Shinkong Insurance with a short position of Vivotek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Vivotek.

Diversification Opportunities for Shinkong Insurance and Vivotek

-0.31

Correlation Coefficient

Shinkong Insurance  Vivotek

Very good diversification

The 3 months correlation between Shinkong and Vivotek is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Vivotek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivotek and Shinkong Insurance 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 Shinkong Insurance Co are associated (or correlated) with Vivotek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivotek has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Vivotek go up and down completely randomly.

Pair Corralation between Shinkong Insurance and Vivotek

Assuming the 90 days trading horizon Shinkong Insurance Co is expected to generate 0.64 times more return on investment than Vivotek. However, Shinkong Insurance Co is 1.56 times less risky than Vivotek. It trades about 0.13 of its potential returns per unit of risk. Vivotek is currently generating about -0.04 per unit of risk. If you would invest  9,390  in Shinkong Insurance Co on September 30, 2024 and sell it today you would earn a total of  1,060  from holding Shinkong Insurance Co or generate 11.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shinkong Insurance Co  vs.  Vivotek

Shinkong Insurance

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shinkong Insurance Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Shinkong Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vivotek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vivotek has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Vivotek is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Shinkong Insurance and Vivotek

The main advantage of trading using opposite Shinkong Insurance and Vivotek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinkong Insurance position performs unexpectedly, Vivotek 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 Vivotek will offset losses from the drop in Vivotek's long position.

The idea behind Shinkong Insurance Co and Vivotek 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.