Correlation Between Sun Race and Taishin Financial
Can any of the company-specific risk be diversified away by investing in both Sun Race and Taishin Financial 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 Sun Race and Taishin Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Race Sturmey Archer and Taishin Financial Holding, you can compare the effects of market volatilities on Sun Race and Taishin Financial 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 Sun Race with a short position of Taishin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Race and Taishin Financial.
Diversification Opportunities for Sun Race and Taishin Financial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sun and Taishin is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sun Race Sturmey Archer and Taishin Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taishin Financial Holding and Sun Race 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 Sun Race Sturmey Archer are associated (or correlated) with Taishin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taishin Financial Holding has no effect on the direction of Sun Race i.e., Sun Race and Taishin Financial go up and down completely randomly.
Pair Corralation between Sun Race and Taishin Financial
Assuming the 90 days trading horizon Sun Race Sturmey Archer is expected to under-perform the Taishin Financial. In addition to that, Sun Race is 7.25 times more volatile than Taishin Financial Holding. It trades about -0.39 of its total potential returns per unit of risk. Taishin Financial Holding is currently generating about -0.08 per unit of volatility. If you would invest 5,130 in Taishin Financial Holding on August 30, 2024 and sell it today you would lose (20.00) from holding Taishin Financial Holding or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Race Sturmey Archer vs. Taishin Financial Holding
Performance |
| Timeline |
| Sun Race Sturmey |
| Taishin Financial Holding |
Sun Race and Taishin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Race and Taishin Financial
The main advantage of trading using opposite Sun Race and Taishin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Race position performs unexpectedly, Taishin Financial 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 Taishin Financial will offset losses from the drop in Taishin Financial's long position.| Sun Race vs. Lee Chi Enterprises | Sun Race vs. Basso Industry Corp | Sun Race vs. Giant Manufacturing Co | Sun Race vs. Merida Industry Co |
| Taishin Financial vs. Mega Financial Holding | Taishin Financial vs. Taiwan Cooperative Financial | Taishin Financial vs. ESUN Financial Holding | Taishin Financial vs. First Financial Holding |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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