Correlation Between Cathay TAIEX and Sinopac Securities
Can any of the company-specific risk be diversified away by investing in both Cathay TAIEX and Sinopac Securities 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 Cathay TAIEX and Sinopac Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathay TAIEX Daily and Sinopac Securities Corp, you can compare the effects of market volatilities on Cathay TAIEX and Sinopac Securities 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 Cathay TAIEX with a short position of Sinopac Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathay TAIEX and Sinopac Securities.
Diversification Opportunities for Cathay TAIEX and Sinopac Securities
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cathay and Sinopac is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cathay TAIEX Daily and Sinopac Securities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopac Securities Corp and Cathay TAIEX 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 Cathay TAIEX Daily are associated (or correlated) with Sinopac Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopac Securities Corp has no effect on the direction of Cathay TAIEX i.e., Cathay TAIEX and Sinopac Securities go up and down completely randomly.
Pair Corralation between Cathay TAIEX and Sinopac Securities
Assuming the 90 days trading horizon Cathay TAIEX is expected to generate 1.95 times less return on investment than Sinopac Securities. In addition to that, Cathay TAIEX is 1.44 times more volatile than Sinopac Securities Corp. It trades about 0.03 of its total potential returns per unit of risk. Sinopac Securities Corp is currently generating about 0.08 per unit of volatility. If you would invest 3,608 in Sinopac Securities Corp on September 13, 2024 and sell it today you would earn a total of 46.00 from holding Sinopac Securities Corp or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cathay TAIEX Daily vs. Sinopac Securities Corp
Performance |
| Timeline |
| Cathay TAIEX Daily |
| Sinopac Securities Corp |
Cathay TAIEX and Sinopac Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathay TAIEX and Sinopac Securities
The main advantage of trading using opposite Cathay TAIEX and Sinopac Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathay TAIEX position performs unexpectedly, Sinopac Securities 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 Sinopac Securities will offset losses from the drop in Sinopac Securities' long position.| Cathay TAIEX vs. Cathay TIP TAIEX | Cathay TAIEX vs. Cathay Nasdaq AI | Cathay TAIEX vs. Cathay Dow Jones | Cathay TAIEX vs. Cathay Bloomberg Barclays |
| Sinopac Securities vs. YuantaP shares Taiwan Top | Sinopac Securities vs. Yuanta Daily Taiwan | Sinopac Securities vs. Cathay Taiwan 5G | Sinopac Securities vs. Yuanta Daily CSI |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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