Correlation Between Standard Foods and Taisun Enterprise
Can any of the company-specific risk be diversified away by investing in both Standard Foods and Taisun Enterprise 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 Standard Foods and Taisun Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Foods Corp and Taisun Enterprise Co, you can compare the effects of market volatilities on Standard Foods and Taisun Enterprise 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 Standard Foods with a short position of Taisun Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Foods and Taisun Enterprise.
Diversification Opportunities for Standard Foods and Taisun Enterprise
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Standard and Taisun is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Standard Foods Corp and Taisun Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taisun Enterprise and Standard Foods 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 Standard Foods Corp are associated (or correlated) with Taisun Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taisun Enterprise has no effect on the direction of Standard Foods i.e., Standard Foods and Taisun Enterprise go up and down completely randomly.
Pair Corralation between Standard Foods and Taisun Enterprise
Assuming the 90 days trading horizon Standard Foods Corp is expected to under-perform the Taisun Enterprise. But the stock apears to be less risky and, when comparing its historical volatility, Standard Foods Corp is 1.29 times less risky than Taisun Enterprise. The stock trades about -0.1 of its potential returns per unit of risk. The Taisun Enterprise Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,200 in Taisun Enterprise Co on October 25, 2024 and sell it today you would lose (250.00) from holding Taisun Enterprise Co or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Foods Corp vs. Taisun Enterprise Co
Performance |
| Timeline |
| Standard Foods Corp |
| Taisun Enterprise |
Standard Foods and Taisun Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Foods and Taisun Enterprise
The main advantage of trading using opposite Standard Foods and Taisun Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Foods position performs unexpectedly, Taisun Enterprise 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 Taisun Enterprise will offset losses from the drop in Taisun Enterprise's long position.| Standard Foods vs. Uni President Enterprises Corp | Standard Foods vs. TTET Union Corp | Standard Foods vs. President Chain Store | Standard Foods vs. Charoen Pokphand Enterprise |
| Taisun Enterprise vs. AGV Products Corp | Taisun Enterprise vs. Wei Chuan Foods | Taisun Enterprise vs. Chia Hsin Cement | Taisun Enterprise vs. Grand Pacific Petrochemical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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