Correlation Between Sampo Corp and Taiwan Secom
Can any of the company-specific risk be diversified away by investing in both Sampo Corp and Taiwan Secom 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 Sampo Corp and Taiwan Secom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo Corp and Taiwan Secom Co, you can compare the effects of market volatilities on Sampo Corp and Taiwan Secom 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 Sampo Corp with a short position of Taiwan Secom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Corp and Taiwan Secom.
Diversification Opportunities for Sampo Corp and Taiwan Secom
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sampo and Taiwan is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Corp and Taiwan Secom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Secom and Sampo Corp 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 Sampo Corp are associated (or correlated) with Taiwan Secom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Secom has no effect on the direction of Sampo Corp i.e., Sampo Corp and Taiwan Secom go up and down completely randomly.
Pair Corralation between Sampo Corp and Taiwan Secom
Assuming the 90 days trading horizon Sampo Corp is expected to generate 2.59 times less return on investment than Taiwan Secom. But when comparing it to its historical volatility, Sampo Corp is 1.16 times less risky than Taiwan Secom. It trades about 0.02 of its potential returns per unit of risk. Taiwan Secom Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,940 in Taiwan Secom Co on September 3, 2024 and sell it today you would earn a total of 2,910 from holding Taiwan Secom Co or generate 29.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo Corp vs. Taiwan Secom Co
Performance |
| Timeline |
| Sampo Corp |
| Taiwan Secom |
Sampo Corp and Taiwan Secom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Corp and Taiwan Secom
The main advantage of trading using opposite Sampo Corp and Taiwan Secom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Corp position performs unexpectedly, Taiwan Secom 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 Taiwan Secom will offset losses from the drop in Taiwan Secom's long position.| Sampo Corp vs. TECO Electric Machinery | Sampo Corp vs. Walsin Lihwa Corp | Sampo Corp vs. Asia Cement Corp | Sampo Corp vs. Far Eastern New |
| Taiwan Secom vs. Taiwan Shin Kong | Taiwan Secom vs. President Chain Store | Taiwan Secom vs. Yulon Finance Corp | Taiwan Secom vs. Giant Manufacturing Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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