Correlation Between Shieh Yih and Kuo Yang
Can any of the company-specific risk be diversified away by investing in both Shieh Yih and Kuo Yang 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 Shieh Yih and Kuo Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shieh Yih Machinery and Kuo Yang Construction, you can compare the effects of market volatilities on Shieh Yih and Kuo Yang 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 Shieh Yih with a short position of Kuo Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shieh Yih and Kuo Yang.
Diversification Opportunities for Shieh Yih and Kuo Yang
Good diversification
The 3 months correlation between Shieh and Kuo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Shieh Yih Machinery and Kuo Yang Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuo Yang Construction and Shieh Yih 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 Shieh Yih Machinery are associated (or correlated) with Kuo Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuo Yang Construction has no effect on the direction of Shieh Yih i.e., Shieh Yih and Kuo Yang go up and down completely randomly.
Pair Corralation between Shieh Yih and Kuo Yang
Assuming the 90 days trading horizon Shieh Yih Machinery is expected to under-perform the Kuo Yang. In addition to that, Shieh Yih is 1.46 times more volatile than Kuo Yang Construction. It trades about -0.02 of its total potential returns per unit of risk. Kuo Yang Construction is currently generating about -0.02 per unit of volatility. If you would invest 2,290 in Kuo Yang Construction on September 26, 2024 and sell it today you would lose (60.00) from holding Kuo Yang Construction or give up 2.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Shieh Yih Machinery vs. Kuo Yang Construction
Performance |
Timeline |
Shieh Yih Machinery |
Kuo Yang Construction |
Shieh Yih and Kuo Yang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shieh Yih and Kuo Yang
The main advantage of trading using opposite Shieh Yih and Kuo Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shieh Yih position performs unexpectedly, Kuo Yang 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 Kuo Yang will offset losses from the drop in Kuo Yang's long position.Shieh Yih vs. Yang Ming Marine | Shieh Yih vs. Evergreen Marine Corp | Shieh Yih vs. Eva Airways Corp | Shieh Yih vs. U Ming Marine Transport |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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