Correlation Between Shinkong Insurance and Castles Technology

Can any of the company-specific risk be diversified away by investing in both Shinkong Insurance and Castles Technology 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 Castles Technology 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 Castles Technology Co, you can compare the effects of market volatilities on Shinkong Insurance and Castles Technology 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 Castles Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinkong Insurance and Castles Technology.

Diversification Opportunities for Shinkong Insurance and Castles Technology

-0.75

Correlation Coefficient

Shinkong Insurance  Castles Technology

Pay attention - limited upside

The 3 months correlation between Shinkong and Castles is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shinkong Insurance Co and Castles Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castles Technology 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 Castles Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castles Technology has no effect on the direction of Shinkong Insurance i.e., Shinkong Insurance and Castles Technology go up and down completely randomly.

Pair Corralation between Shinkong Insurance and Castles Technology

Assuming the 90 days trading horizon Shinkong Insurance Co is expected to generate 0.46 times more return on investment than Castles Technology. However, Shinkong Insurance Co is 2.16 times less risky than Castles Technology. It trades about 0.15 of its potential returns per unit of risk. Castles Technology Co is currently generating about -0.22 per unit of risk. If you would invest  9,450  in Shinkong Insurance Co on September 25, 2024 and sell it today you would earn a total of  1,150  from holding Shinkong Insurance Co or generate 12.17% return on investment over 90 days.

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

Shinkong Insurance Co  vs.  Castles Technology Co

Shinkong Insurance

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shinkong Insurance Co are ranked lower than 11 (%) 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.

Castles Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castles Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Shinkong Insurance and Castles Technology

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

The idea behind Shinkong Insurance Co and Castles Technology Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.